Travel insurance premiums may rise with falling rupee

The main claims that insurance companies incur in the travel insurance portfolio is towards emergency medical expenses

Travel News
Travel News

Travellers may have to shell out more for their outbound travel expenses as travel insurance bills may rise due to the sliding rupee.

The claims for outbound travel insurance are paid out by general insurance companies in foreign currency while the insurance companies collect premium in rupees.

The record decline in the value of the Indian rupee has hit the travel portfolio of travel insurance companies, said experts in the insurance industry.

The fall in the Indian rupee, which has seen a depreciation of 22 per cent against the US dollar, from the levels of 44.46 in January 2011 to 54.29 in December, is proving to be a major concern to the travel insurance industry. And analysts estimate that the year 2012 could continue to be a tough for the rupee and it could continue trading in the broad range of 50-54, with some analysts predicting that it may touch 58 as per a report in HBL by Deepa Nair & Nivedita Ganguly.

The main claims that insurance companies incur in the travel insurance portfolio is towards emergency medical expenses.

“At present travel insurance market is very competitive in India. One can get a cover for $50,000 for as low as Rs 400 (excluding the US),” said Mr Vikramjeet Singh, Head-Travel Insurance, Bajaj Allianz General Insurance.

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