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Insuring domestic travellers will be the next thrust area for general insurance companies. Currently, the insurers’ travel portfolio primarily caters to international travellers from the country. They are now shifting the focus to domestic travellers as there is an increase in domestic traffic.
“We see the biggest opportunity in insuring trips within India. Our company is in the process of launching domestic travel insurance,” said Abhay Kumar, executive vice-president (retail underwriting) at IFFCO Tokio General Insurance. The insurer already has two overseas travel policies. It is also planning to widen the coverages of its existing products by introducing new features such as cancellation / curtailment of trips, among others.
The domestic travel insurance still contributes in single digits to the total portfolio of general insurance firms. While experts said it is growing annually at the rate of 10-15 per cent, travellers prefer to buy policies only in regions where it is mandatory to do so. Rakesh Jain, CEO of Reliance General Insurance, said that while international travel is growing organically, his company recognises that domestic travel is an untapped market with huge potential and is focusing on it. “Compared to 1.5 crore (15 million) international travellers from India, there are about 80 crore (800 million) domestic travellers.”
At Reliance General, travel insurance is offered to leisure travellers, corporate travel and student travel. Jain said that new destinations based on geography, such as Asia and Schengen, have emerged recently. 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 and passport, among others. However, while medical costs incurred overseas are covered, individuals travelling abroad for treatment 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 of underwriting and claims at ICICI Lombard General Insurance, said that with customers becoming increasingly aware of the rising cost of medical facilities abroad, they — especially those in the higher age band or travelling for long duration — are conscious about travel insurance and the coverage it provides.
Datta, however, said 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 and 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 vice-president (consumer lines) at Tata AIG General Insurance, said that it would be launching revised student guard policy for students travelling abroad with additional benefits in March 2014.
Apart from business, leisure, and domestic travel, Tata AIG offers another product — Asia Travel Guard — for people travelling to neighbouring countries for a short period of time. Ramani added that the premium for the same is as low as Rs 350 for a three-day trip.
According to industry estimates the travel insurance business has been growing at about 12-15 per cent annually for the past decade, penetration of travel insurance has been restricted at 10-20 per cent. For domestic travel, the figure stands at five to eight per cent.
WHAT IS COVERED
- Medical expenses incurred, due to emergency situations or accidents
- Loss of passport/visa
- Loss of baggage and hand baggage
- Loss of air tickets
- Financial loss due to theft or robbery
- Cover for home while one is on a holiday
- Accommodation charges for trip delay
- Add-on services for family at home while one is travelling
- Special services for senior citizens
