Terror toll: Risk premium for foreign tourists up by 10%

NEW DELHI: The recent spate of terror attacks in India has led to a rise in travel insurance premium by up to 10% for foreign tourists. According to travel industry insiders, visitors from the US, UK, France and Australia are likely to pay higher premium for the mandatory travel insurance cover when they travel to India.

Although the exact quantum of the rise is not known, people with the knowledge of the development indicated that it has gone up by 5-10% for foreigners after the terror attacks rocked Mumbai last month.

Typically, the amount of travel insurance cover depends on the travel advisories issued by a country for its citizens travelling to a particular location. If a country issues a travel warning advising against travel to a particular location, insurance companies do not cover such visits.

However, if there is an advisory issued after a terror attack, or a natural calamity, asking its citizens to take extra precaution while travelling, insurance companies hike the premium. According to reports in international media, the travel insurance premium to the US increased by 20% after 9/11. Praveen Gandhi, CEO of corporate travel company Carlson Wagonlitm, said: ���The travel insurance premium for corporate travel is fixed on an annual basis. It may rise significantly in the beginning of 2009, when they are renegotiated.���



According to travel industry estimates, the number of foreign visitors to India dropped by 2.1% in November 2008 to 5.21 lakh as against 5.32 lakh in the comparable period last year. "The actual impact of the terror attacks will be clear in the next few months. Certain countries have issued travel advisories, which means that the travel insurance premium for visiting India will go up and impact the country���s inbound tourism," Future Generali MD and CEO Deepak Sood said.

"Air ticket bookings to India have declined by 18-20% so far in December as against last year," said Amadeus India MD Ankur Bhatia. He added that the premium for travel insurance covers for foreign tourists did go up immediately after the terror attacks and is expected to settle down in the next few weeks.