The rupee, which has depreciated about 23% since May this year, has increased the loss ratios for the travel insurance segment. Travel insurance premiums are paid in Indian rupees, while the claims are paid in US dollars.
Hence, there is a 20-25% rise in the loss ratios for general insurers. In order to offset this loss, insurance companies are gearing up to increase the premiums for this segment.
“The sharp depreciation of the rupee has impacted the current business scenario and has lowered demand for overseas travel. If the Indian rupee remains weak and the current business scenario persists, insurers will have to increase the cost of travel insurance to deal with the situation,” said Rakesh Jain, CEO of Reliance General Insurance.
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