Travel Cover Of Private Insurers 10-30% Dearer

Indian tourists travelling overseas watch out. If you choose to take travel health insurance cover, you will have to shell out more money than what you have been doing so far.

The reason? Travel health risk products of private non-life insurance players will be priced 10 to 30 per cent more than the existing overseas mediclaim plans offered by state-owned insurers.

However, the new products will be more comprehensive, offering medical emergency expenses and repatriation facility for Indian travellers.

Munich Reinsurance's subsidiary Mercur Assistance has tied up with local third-party administrator (TPA), Paramount Healthcare Management, to offer the product to Indian tourists travelling overseas.

 

Paramount is the first TPA to offer overseas medical services through its call centre in the country.

At the same time, it will also undertake to service tourists coming into India, who are Mercur Assistance's clients.

According to latest data available, more than 2.4 million tourists visit India yearly, and around 2 to 2.5 million locals travel abroad.

"Premiums in India are on the lower side. We estimate premiums to rise by at least 10 to 30 per cent. However, through our tie-ups and the assistance offered by Mercur Assistance, there is a huge possibility of cost cutting and cost control," said Munich Re senior underwriter Jurgen Fischer.

He added that the claim ratio would not be much higher than what prevails in the UK market at around 1 to 1.5 per cent.

"Indians travelling abroad already have a product in the market with the assistance of Mercury Travels. This is a product the new insurance players will have to compete with," said Fischer.

Unique to the existing product would be Paramount's call centre, which would allow Indian travellers to call back home and speak to doctors who understand their ailment and speak their language, said Paramount Healthcare managing director Nayan Shah.

Representatives of Munich Re and Mercur Assistance were in the country recently to market their product to new insurance players.

Said Mercur Assistance board member Rosemarie Schindler: "The response has been quite favourable".

In addition to offering administrative services overseas to the insured through its subsidiary, Munich Re will also offer reinsurance cover to insurance companies.

"Initially we will take a higher percentage of the risk on to our books. However, over the years, as volumes build up and the portfolio becomes more balanced, insurers will be better positioned to take a higher self retention," said Fischer.

Many international clients of Mercur Assistance reinsure with Munich Re, said Schindler. This is provided that the premiums are scientifically calculated.

Munich Re works with more than 40 per cent of the health insurance players in Germany alone and this gives them a huge volume.

"We have 7,400 major medical cases of tourists annually. Of these, 1,000 tourists are repatriated," said Fischer.

To date, medical risk products offered in the country are not reinsured, and suffer a high claims ratio on account of the "relatively low" premium, said Shah.

Further, the existing product in the market fails to repatriate the patient back to his homeland.

The new product which will be designed as per the insurer, will offer personal liability cover, hospital daily allowance, and other features in addition to the basic medical expenses.