The rupee’s fall has put pressure on the travel insurance portfolios of leading general insurance players and they are likely to go to sector regulator – Insurance Regulatory Development Authority (Irda) – to refile and restructure the premium charges of their products soon.
The claims for outbound travel insurance are paid by general insurance companies in foreign currencies, while they collect the premium in rupees in India. General insurers are feeling the heat as rupee has now fallen more than 5% this year against the dollar, making it the worstperforming Asian currency.
According to Sanjay Datta , head (underwritings and claims), ICICI Lombard, the general insurance giant is under pressure and is likely to approach the regulator to have a relook at policy rates. “The rupee fluctuation has been a matter of concern for us as far as travel portfolio is concerned. Most probably, we will approach Irda to hike premium charges soon,” he said.
Subir Bhattacharyya, GM, National Insurance, said the domestic currency’s fall has given wrinkles to their foreheads regarding the travel portfolio. “It is certainly affecting our margins,” he told TOI.
The April-June quarter is usually the best for the travel insurance segment, pegged at around Rs 250 crore.
But the bad news is that some analysts feel the rupee could touch the 60-mark in the coming days.
Another private player, HDFC Ergo, felt that there is a possibility to revise premiums . “Since almost all claims in travel insurance are denominated in foreign currency , the claim amounts would go up in case the rupee depreciates . If the depreciating trend continues, premiums may need to be revised upwards ,” added Karan Chopra, member of executive management & head (retail business ), HDFC Ergo.
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