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

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LIC- Life Insurance Corporation of India Proves ‘The Most’ Consumer Friendly

LIC also outshined in private insurer in business with a slide of only 5.6% as against private insurers which are all in double digits ranging from 17% to 42%. The only exception is HDFC Life Insurance, which has a fall percentage of 5.6%. IRDA monitors fall percentage as the number of policies fell during the year divided by the average of the policies in force at the beginning and end of the year, according to media reports.

Life Insurance Policy (LIC) has outshined other insurance agencies in terms of consumer friendliness parameters. It had fewer slips, higher claim settlement and no penalties from the regulator.

Interestingly, the claim settlement percentage of LIC was better than private life insurance agencies. Its settlement percentage increased to 97.73% in FY13 from 97.42% in the previous year. While the rejections was only 1.12% compared to 1.30% earlier, reported media.

Private insurance agencies recorded a fall in settlement percentage to 88.65% from 89.34% in FY12. In its annual report FY13, Insurance Regulatory and Development Authority states (IRDA), “Private insurers had repudiated more number of claims when compared to LIC. The percentage of repudiations (by private insurers) was 7.85%, almost unchanged from pervious years 7.82% in FY12.”

According to TOI, “The 13-month persistency (policies which are renewed after a year) is the highest for PNB MetLife at 71.22% on a much smaller business. LIC, Max Life Insurance and IDBI Federal Life Insurance have a 13-month persistency of 70%. For other private companies, the ratio ranges from a low of 36% to 69%.

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