Travel cover gets a new push

General insurers' travel insurance portfolios are growing at brisk pace thanks to travel houses bundling covers with their tour packages.

The travel insurance market is currently growing at a robust rate of 35 per cent, after having seen increase in penetration over the last few years.

About 1.7 million overseas trips were covered last year by insurance companies, but the potential is still huge. The trips covered were just 25 per cent of the total of around 6.5 million overseas trips that Indians undertake every year.

"The travel insurance penetration has increased from 15 per cent to 25 per cent over the last five years. Pure leisure travel is growing at 25 per cent annually," says Sudhir Menon, head - travel insurance and worksite marketing, ICICI Lombard General Insurance Company.

Selling travel insurance has also helped travel houses offset loss of commission income on sale of air tickets due to declining air fares.

Nearly 65 per cent of the overseas trips happen to south-east Asian and Indian ocean countries. Travel insurance is a must before a visa is issued for European countries, while it is not a pre-requisite for travelling to neighbouring countries.

Insurers attribute the rise in sale of travel insurance policies to the bundling of cover with tour packages by travel houses and also to the awareness created by marketing efforts of insurance companies.

An increasing number of travel houses are compulsorily including travel insurance policies as part of the tour.

For instance, SOTC and Cox & Kings have subsidised the cost of travel insurance policy and included it in the prices of tour packages.

Raj Travels and Thomas Cook include travel insurance plans as part of their package tours to European countries where insurance is mandatory.

Travel houses earn five per cent commission on every air ticket, and 15 per cent commission on travel insurance policies sold.

Says Arup Sen, executive director, Cox&Kings, "All our customers who travel abroad are covered. Many embassies insist on the passenger obtaining an insurance policy before issuing a visa. Tour operators like us insist that the passenger buys a travel insurance."