Low off-take of travel insurance despite Indians traveling more frequently and on longer duration trips

MUMBAI - ICICI Lombard General Insurance Company Ltd. unveiled the ‘ICICI Lombard Travel Trends 2014’ survey on the occasion of ‘World Tourism Day’. The survey focuses on revealing the difference in behaviour among travelers when it comes to international versus domestic travel. The survey covered 1063 respondents across a mix of metros and smaller cities i.e. Mumbai, Kolkata, Hyderabad, Ahmedabad and Chandigarh who have traveled to international as well as domestic locations.

Sanjay Datta, Chief-Underwriting & Claims, ICICI Lombard GIC Ltd., said, “ICICI Lombard’s Travel Trends survey reveals interesting trends in terms of Indians traveling more frequently and on longer duration trips, driven by higher disposable income and discounts. Despite the increased travel behaviour, purchase of travel insurance especially for travel to Asian countries and in the domestic sector remains extremely low. It is important that Indian travelers realize the criticality of availing travel insurance for covering unforeseen risks pertaining to medical emergencies, tour related mishaps such as baggage loss etc”

Survey Findings
Frequency of Travel: The survey shows that Indians are traveling more frequently for leisure across international and domestic circuits. While 25% respondents have increased the frequency of their foreign trips in the past 3-5 years, almost 30% have done so in case of domestic circuits. Off-season discounts were driving this behaviour for 39% international travelers. On the other hand, unplanned trip was the key reason behind more frequent domestic tours for 57% respondents.

Duration of Travel: As with more frequent travel, domestic travelers also enjoyed longer vacations (27% respondents) within the country compared to overseas trips (19% respondents) in the past 3-5 years. Increase in disposable income (63%) and discount/deals (49%) were driving this behaviour towards longer duration stay for both domestic and international circuits. In a clear indicator of the Conservative spending mentality, nearly 90% respondents opting for international and domestic travel utilized personal savings, staying away from loans or any other form of funding for their tour expenses.

Purchase behaviour – Tour bookings: The study reveals that Indians, despite being the world’s 3rd largest internet using population, still rely on travel agents for ticket purchase for their overseas (85%) and domestic (78%) leisure trips. Interestingly, while only 4% of international travellers booked their overseas travel through online travel portal, as much as 20% of domestic travelers used online travel portals for booking their trips – a factor of comfort with the destination when it comes to domestic tours.

Purchase behaviour – Travel insurance: Indians clearly give more importance to travel insurance for international tours compared to domestic trips. The survey results show that while taking leisure trips, higher number of Indians purchased overseas travel insurance (38%) as compared to domestic travel insurance (4%). This was despite clear acknowledgement of need to possess a travel insurance policy for both forms of tour. Concerns over medical exigencies and baggage loss were the key reasons behind purchasing overseas travel insurance. The findings are pertinent as ICICI Lombard’s claim data point at rise in medical and non-medical claims.

Among those who did not purchase an overseas travel insurance policy, an alarming 50% felt that purchasing the same is unnecessary if one already has some other insurance policy. For the un-insured domestic travelers, nearly 60% did not see the need to buy a policy given the short flight distance to the destination.

Findings on International travel
- Singapore (33%), UAE (28%) and Thailand (27%) were the most visited Asian countries in the last 1 year
- Almost 60% overseas travelers preferred a stay of 4-7 days while 30% stayed longer i.e. for 8-10 days
- Pleasant climate (56%), cultural & heritage diversity (46%) and more peaceful location (44%) were the main reasons for preferring overseas locations
- 93% respondents were aware of travel insurance, 80% considered travel insurance as essential, however only 38% purchased an insurance policy
- Medical exigencies (82%) and baggage loss (69%) were the primary reasons for insurance purchase
- Surprisingly, 30% thought that medical support is not part of overseas travel insurance

Findings from domestic travelers
- Goa (27%), New Delhi (24%) and Mumbai (22%) were the top three locations traveled to by Air
- 65% overseas travelers preferred a stay of 4-7 days while nearly 30% stayed longer i.e. for 8-10 days
- 86% of respondents were aware of travel insurance and 64% considered travel insurance to be essential. However, only 4% actually purchased a policy
- 23% believed that having a medical insurance is sufficient while travelling, while 58% did not purchase a policy given the short distance of flight

sourced:traveldailynews.asia