Top five risks travel insurers and underwriters face in Nepal


The multimillion dollar insurance fraud scam in Nepal has caught the attention of travellers and insurers around the world, and has been widely reported on by international media in several languages. The Government of Nepal have been urged to take action against the people behind these companies, or risk insurers boycotting and blacklisting the country, and/or taking legal action through the international courts.


We have identified the top 5 risks that travel insurers face in Nepal and how they can avoid them:


(1) Not Educating Travellers

In 2018 there were close to 1-million travellers who arrived in Nepal. This year, the Tourism Board are predicting 30% more. A vast majority of travellers who are rescued by helicopter and/or receive treatment in hospitals, can be avoided by informing them of the risks prior to travel.


Some trekking companies and guides are being blamed for pushing travellers to ascend too quickly, causing AMS, HAPE and HACE, and for not descending quickly enough with trekkers who start to experience these symptoms. While this should never happen with an experienced guide through a reputable trekking agency, it does still happen.

Travellers need to be educated on how to avoid altitude related illnesses, and the importance of personal hygiene, and what they can do to help themselves in the event they do get sick. All travellers should carry their insurance policy (and passport) in a waterproof ziploc bag, at all times. Trekkers should insist to their guide that they immediately descend upon experiencing symptoms of Acute Mountain Sickness.


In the event that symptoms do deteriorate, travellers should insist that they are allowed to call or email their travel insurance company through the emergency assistance details listed on the policy. All guides carry phones. A majority use WhatsApp, Viber and Skype for voice, and they all have data plans for emails.


Insurers should write in CAPITALS on the policy, that failure to call the insurer or assistance provider could result in a claim being denied.


(2) Pay and Claim

There is a growing trend in Nepal of trekking organisations, helicopter charter companies and hospitals who are charging patients upfront, taking payments from their credit cards — and telling them to claim it back from their insurer. This creates both a duty of care, and a financial risk, to the traveller, and the insurer.


If the traveller has already paid, there is little to no recourse option for the insurer. Not only will the decision be taken away from the insurer of whether a helicopter is required or not, but they will also have no choice as to which helicopter company will be used, or which hospital to send the patient.


This will result in higher prices for helicopters and medical bills being charged to the patient and if insurers refuse to reimburse the traveller, it will create negative reviews online, and will likely attract negative media attention that will affect brand reputation.


Insurers should write in CAPITALS on the policy that all pay and claim cases will be denied. All reputable providers in Nepal will accept GOP’s, providing a completely cashless service for travellers, so there is absolutely no reason for any provider to be taking payments from travellers.


(3) New Companies

As a result of the recent negative publicity that some providers have recently received in the crackdown on travel insurance fraud in Nepal, it is expected that some of these companies will simply close, and reopen under a new brand. There is already evidence that some of the unscrupulous people behind the named fraudulent companies are creating new allegiances, and financing new business start-ups.


Insurers should be wary of new companies in Nepal offering medical assistance and cost containment services. This is not to say that every new company will be a front for fraudulent activity, but it is very important for insurers to conduct thorough due diligence on all new providers.


This should including checking incorporation documents, tourist board registration, tax registration, forex registration, proof of liability insurance, banking procedures, and details of all owners and shareholders. Use best judgement. Ask your trusted helicopter and hospital providers if they know these people or of the company.


There are more people in Nepal who want the fraud to stop than there are who want it to carry on. You will find that people are quite open to giving advice if you ask the right questions.


(4) Helicopter Charter Companies

In our humble opinion, there is absolutely no reason for insurers to use helicopter charter companies in Nepal. They don’t own helicopters. They just have agreements with companies who do own helicopters. It stands to reason that a helicopter booked through a charter company will cost more than going directly to the helicopter company itself.


There are only 10 companies in Nepal who own helicopters, with four new companies being added this year. In our experience, we have been able to call and email our trusted heli providers who are available 24/7 and in the unlikely event they do not have a heli available, they have been able to locate one that is available, at no extra cost.


(5) Hospitals without Helipads

For anyone who has visited Nepal, one of the first things you will experience is the bone shattering taxi ride from the airport to your hotel due to extremely poor road conditions, and more often than not, the roads are incredibly busy. Now imagine you are a sick or injured patient laying in the back of an ambulance, on a hot day. Not a pleasant experience! Taking an ambulance from the airport to the hospital after a helicopter rescue is completely pointless and unnecessarily delays treatment.


Hospitals without helipads will argue that they are close to the airport, and two of them are, but they are still 20–30 minutes away. It’s an unnecessary delay in treatment, and besides, those hospitals are smaller basic facilities who rely on the larger hospitals for critical services such as CT scans, ultrasound, operating rooms and laboratory services.


There are three full-service hospitals in and around Kathmandu with helipads who offer excellent services and cost no more than the smaller, more ‘boutique’ clinics. They also have international patient departments with private rooms and direct billing agreements. As the insurer, you can make this a condition of your agreement with heli providers, that they must fly the patient directly to a hospital of your choice, and in our opinion that should be one with a heli pad.


Conclusion

Unnecessary helicopter lifts, over-treatment at hospitals, over-billing and multiple-billing has long been a problem in Nepal. The response from a few of the fraudulent companies has been to point out that insurers never complained, meaning that they just kept doing it because they knew insurers would pay.


It’s every insurance company and assistance provider’s responsibility for checking that reasonable and customary costs have been charged to you, and if you believe that you have been overcharged, question it.


A version of this article was published in Insurance Business Magazine

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