As per a report by Sangeetha G in Financial Chronicle, travellers give least weight to insurance when they travel within India, with only 2% of them buy an insurance.
Travel insurance has been mainly pegging its growth to outbound travel. Domestic travel is still an untapped market and building awareness and demand can take the segment to the next level.
Travel insurance currently accounts for a miniscule portion of the total premium of insurance sector, but is growing in healthy double digits from a small base.
Of this more than 90 % of the premium comes from outbound travel. Data from Bajaj Allianz General Insurance shows that Indians travelling to Europe purchase travel insurance as it is mandatory for those visiting Schengen countries, which includes most of the European countries.
About 14 % of travelers purchase travel insurance policies for trips to USA and Canada as medical expenses are very high in these countries.
Travelers give the least importance to insurance when they are traveling within India and only 2 % of them buy a travel insurance policy for domestic trips.
“The growth will come from the domestic market as India is as huge as European continent and domestic travel has been on a rise,” said Mukesh Kumar, Executive Director, HDFC ERGO General Insurance.
Suresh Sugathan, Head, Health and travel insurance of Bajaj Allianz General Insurance, finds that demand for insurance among domestic travelers has started picking up.
In five years the company hopes to double its premium share from domestic travel from less than 2 % now. The number of policies in the travel segment as such is growing by 15 % and premium by 21 %.
The insurer is in the process of coming out with a revised product specifically for domestic travel. “We are looking at various channels to sell travel insurance, apart from the traditional agents as this is a low-ticket product and mostly sold while the client travels.
Travel agents, holiday booking sites, airline sites, bus service sites and cab services are the channels which can offer insurance to their clients.
Most of them are now selling it as an option along with their products, while some bundle it with their tickets as the premiums are low,” he said.
When the premium for outbound travel can range between INR 1000 to INR 5000, depending upon the medical costs in the visiting country, domestic premium can be less than INR 200.
Some of the states like Maharashtra had been planning to mandate insurance for those travelling outside the state after a travel mishap occurred sometime back.
Such government initiatives will go a long way in growing the insurance market. Sugathan finds that travel can also become a part of the life cover given under Pradhan Mantri Jan Dhan Yojana.
“Travel insurance primarily covers medical costs occurred during a travel. So it can be bundled with health insurance products and this will help receive tax exemption under section 80D,” Kumar added.
However, most of the travel products available today provide several add-on benefits, including loss of belongings, cover of household items during the travelling period, maternity cover, compassionate visit of a near one in the event of hospitalization and third-party liabilities in case of accidents.
Large companies buy annual policies to cover travel of all their employees throughout the year and some students going abroad too opt for insurance, but bulk of the market is still with the leisure traveler. (Source: Financial Chronicle)
Curated from 2% domestic travellers buy travel insurance