Stable Rupee leads to flat travel insurance rates

People travelling offshore to benefit from a stable rupee, as there will be no hike in travel insurance rates.

As the rupee gets more stable, chances have increased that insurance companies are unlikely to increase their rates for insurance premiums. The claims for outbound travel insurance are paid out by general insurers in foreign currency while the insurance companies collect premium in rupees.

According to experts, insurers have been facing a higher loss ratio in the travel insurance portfolio as most of them had priced their policies when the rupee was around 55 to a dollar. The travel insurance segment is a very small portfolio for general insurers at 0.1 percent of the total premium collected by the industry.

Although, the travel insurance segment is growing industry, most travellers opt for Schengen area comprising of 26 European countries where having a cover is mandatory. Whereas, tourists believe that when travelling to South East Asia and West Asia one does not need a travel insurance.

For example, a 30-year-old traveller on a 10-day excursion to Europe would pay a premium of about R900 for a $100,000 cover for emergency medical expenses, accidental death, loss of baggage, etc. The same person would pay 30-40 percent more for a trip to the US and Canada. 
Courtesy: thehindubusinessline.com