Thomas Cook India Ltd has entered into an agreement with Tata AIG General Insurance Company to sell travel-related insurance plans through its wholly owned subsidiary, India Alive Tours Ltd.
Thomas Cook has informed the Bombay Stock Exchange (BSE) that India Alive Tours Ltd has been appointed preferred corporate agent of Tata-AIG for procurement of all general insurance business. India Alive proposes to focus its activities mainly on travel related insurance policies.
Come April 1, Thomas Cook India will sell travel-related risk plans across the counter along with its other travel-related products including air tickets, hotel bookings, foreign exchange and travellers cheques.
Ashwini Kakkar, CEO & managing director, Thomas Cook, said earlier that there is immense growth potential in outbound travel. This, in turn, will pave the way for travel insurance products. India is among the least insured countries in the world. Countries such as Germany do not allow entry without an insurance cover.
Thomas Cook had a tie-up with AIG earlier in that its employees travelling overseas were covered by a single group plan of AIG. Thomas Cook India's plans to offer insurance products for Indian travellers is in line with the practice overseas where travellers insure themselves and their luggage before setting out on long trips. A good portion of the travel risk plans would include overseas health cover, and it is possible that the products could be co-branded with Thomas Cook.
This will be possible for Thomas Cook to sell risk products across the counter since the directors including Kakkar, have undergone the stipulated 100-hour training programme and have sat for the agents' examination, a prime Insurance Regulatory Development Authority (Irda) requirement for becoming corporate agents. In fact, Kakkar topped the exam.
Since travel plans do not fall under tariff products, the down slide in commission rates for agents would not stand in the way of Thomas Cook for earning a good commission on sales. According to the Irda norms, non-tariff plans attract an agency commission of up to 15 per cent.
Tata AIG hopes to take a leap and go retail through the offices of the travel agency. This is in vast contrast to the State Bank of India (SBI), which is unable to hawk the products of SBI Life Insurance Company through its 9,000 branch network because the bank directors -- chairman Janki Ballabh and the other six heavyweights -- have not gone through a 15-day classroom session or sat down with other agents to appear for the exam.
As such, SBI Life Insurance Company is forced to sell its products through the tied agency force and cannot tap the bancassurance channel till the necessary amendments are made.
