Money Moves

Insurance giant reviews risks

By Priscilla Chong

This is a fortnightly series of articles focusing on the banking and financial industries

Allan Yu, director, general business, Zurich Insurance Group (HK)
Photo: Johnny Kwok

Vacations are supposed to be times when you can relax and have fun, but as a recent series of TV commercials has served to remind us, it is easier to do that if you take out travel insurance before leaving home.

Even though the majority of travel agencies already offer standard travel insurance for their customers, any compensation is usually payable only in cases of death or permanent disability, and the total amount may be a maximum of HK$100,000. Therefore, individuals are increasingly taking out additional coverage.

"Nowadays, Hong Kong people are more discerning about taking out comprehensive travel insurance. For this reason, our enhanced plan, Travelplus, has been extended to offer protection in the case of natural disasters," says Allan Yu, director of general business for Zurich Insurance Group (HK).

The revamped plan is more comprehensive and caters for the needs of modern travellers. Most such policies specifically exclude accidents which result from dangerous sports, like parachuting or water skiing – just the sort of activities which adventurous people want to try on vacation. Zurich, though, is offering protection for such sports and for terrorist attacks.

After the tsunami, it was also seen that tourists with insurance were not covered for delays, re-routing, extra accommodation expenses, or for charges for documents and air tickets lost during natural disasters.

"Travelplus will fill that gap and provide what people need," Mr Yu says. Another feature is that the previous age restriction will be relaxed, since it has become a trend that more people under the age of 18 are travelling independently.

"A further advantage of the upgraded plan is that the company will pay the unpaid credit card expenses incurred during a trip by an insured person, if they unfortunately pass away while abroad," Mr Yu adds.

Not surprisingly, competition within the insurance sector is stiff and leads to periodic price wars which erode profit margins and pose a threat to insurers.

Moreover, with retail banks also getting into the business, insurance companies are having to explore new distribution channels in order to attract new customers and retain market share.

"We have strategically teamed up with professional associations, chambers and credit card companies to expand our distribution channels," Mr Yu says.

Looking ahead, he sees a generally positive outlook for the insurance sector. He cautions, however, that the success of individual companies will depend on their ability to introduce new products, as well as their dedication to training young professionals to work in this people industry.

Taken from Career Times 10 June 2005, p. 2
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