Insurers see opportunity in domestic travelers

Insuring domestic travellers in India is going to be the next thrust area of growth for general insurance companies as these companies, which till now had the travel portfolio to primarily cater to international travellers from the country, are now shifting focus to domestic travellers as there is an increase in domestic traffic .

 

Abhay Kumar, Executive Vice President (EVP) Retail Underwriting, IFFCO Tokio General Insurance said, "We see the biggest opportunity in insuring trips within India. Our company is in the process of launching Domestic Travel Insurance." 

 

The company already has two overseas travel policies.  IFFCO Tokio General Insurance is also also planning to widen the coverages of their existing products by introducing new features like cancellation of trips, curtailment of trip among others.

 

Travel insurance in India is still contributes in single digits to the total portfolio of general insurance companies. While industry experts said that it is growing annually at the rate of 10-15 %, travellers only prefer to buy a travel policy in regions where it is mandatory. 

 

Rakesh Jain, Chief Executive Officer of Reliance General Insurance added that while international travel is growing organically, they have identified domestic travel as an untapped market with huge potential and are focusing on it."Compared to 1.5 crore international travellers from India there are about 80 crore domestic travelers," said Jain.

 

At Reliance General, travel insurance is offered to leisure travellers, corporate travel and student travel. Jain said that recently  based on geographic destinations like like Asia and Schengen have also emerged. 

 

Travel Insurance in India is usually purchased for overseas travel. These products cover claims arising out of unforeseen incidents including sudden medical costs, loss of baggage, passport among others. However, while medical costs incurred overseas are covered, individuals purposely travelling abroad for treating an ailment is not covered for medical costs under a travel policy. 

 

Keeping this in view, companies are also designing niche products to cater to this segment. ICICI Lombard General Insurance, for example, covers loss of hand baggage and home insurance under its comprehensive policy. Sanjay Datta, Chief-Underwriting & Claims at ICICI Lombard General Insurance said that with customers becoming increasingly aware of the rising cost of medical facilities abroad, those especially in the higher age band and/ or travelling for long trip duration are conscious about travel insurance and the coverage it provides. 

 

Datta however opined that affinity/interest for travel insurance in the lower age band (below 40 years) and people travelling to nearby countries is relatively low. The company offers travel insurance for international travel, domestic travel, student travel, corporate travel and group travel. While ICICI Lombard has tie-ups with travel portals and airline companies, Datta added that online integration with travel portals & travel agents will be an opportunity. 

 

With an increase in the number of students going abroad, companies have started offering customised solutions for student travel. Ramesh Ramani, Senior VP, Consumer Lines, Tata AIG General Insurance said that they would be launching revised student guard policy for students travelling abroad with additional benefits in March 2014.  Apart from business travel, leisure travel and domestic travel, Tata AIG offers a product, Asia Travel Guard for people traveling to neighboring countries for short period.  Ramani added that the premium for the same is as low as Rs. 350 for a 3 day trip.

 

Vikramjeet Singh, Head-Travel Insurance, Bajaj Allianz General Insurance opined that they are in the space of student travel insurance, they were seeing an increased demand for cover for European countries along with the US.  " The travel insurance space has evolved over the last few years, with foreign locations becoming a preferred option not only for leisure trips, but also for corporates to organize meetings, incentives, conventions and events (MICE). Bajaj Allianz sees this MICE segment as a growing area wherein large groups travel together. We have also introduced special policies for cruise journeys (up to 7 days)," he said.

 

Industry estimates suggest that while in the last one decade, travel Insurance business has been growing at about 12-15 % annually, penetration of travel insurance has been restricted to 10-20 %. The figure stands at 5-8 % penetration for domestic travel.