Mumbai Capital

Indian millennials save to travel abroad

Singapore is the top destination for the Indian millennial, who makes at least one overseas trip a year, according to the ICICI Millennial Travel Study 2015. But very few insure their travel, primarily due to the lack of understanding of insurance benefits.

The study looked at the travel habits of those in the 25-to-35-year age bracket, and covered 1,049 respondents over six cities.

It found that nine out of 10 millennials use their own savings to fund an overseas trip. In contrast, 88 per cent of the older generation hardly travelled abroad for leisure.

Aspirational Indian millennials, in fact, prefer international over domestic locations.

While 22 per cent preferred Singapore, 11 per cent picked Australia as a dream destination. Malaysia, Thailand, US, China, and Japan are the other favoured destinations.

“The risk, expectations from travel, and the time available are very different for this generation,” said Sanjay Datta, Chief, Underwriting, Claims and Reinsurance at ICICI general Insurance Company Limited.

For one, he explained, GenY scours the Internet for travel and stay options, and is more willing than the earlier generation to share accommodation. Indeed, the survey found that 47 per cent of the respondents got their information from online marketing or promotional advertisements, and an equal number from social media platforms.

Almost 80 per cent of millennials named culture and heritage as the main drivers when it came to choosing a destination. Also, 71 per cent considered health and hygiene of a country before planning a trip, while 57 per cent preferred a multi-location trip, the main reason being package tours and better discounts by travel companies.

In contrast, a 2013 survey on the same theme found that just 41 per cent gave importance to health and hygiene.

Interestingly, millennials attach more importance to standalone hotels and resorts while planning overseas trips, perhaps because they preferred to travel with spouses and family; just 12 per cent travelled alone.

But here’s the catch: although 90 per cent of millennials are aware of travel insurance, only two out of five respondents purchased it for overseas travel, citing medical emergency and luggage safety as drivers.

The study found that travellers believe their biggest problems revolve around safety issues – what Mr Datta referred to as the ‘human factor’ – terror attacks, political unrest, travel restrictions imposed by some countries, to name a few. These are peculiar to the new age traveller.

“For some reason, travellers avoid buying insurance. They believe nothing will happen to them,” said Mr Datta. Medical evacuation costs from certain countries, he said, can add up to a lot, but travellers tend to gloss over this.

For most insurance companies, motor and health insurance are the biggest segments, with travel insurance accounting for barely 2 per cent of the pie, added Amit Bhandari, Head -- Health and Agri Insurance, ICICI Lombard. The company is working with travel agents to increase awareness among overseas travellers about the risks involved, he says.

Added Datta, “Most travellers are under the belief that travel insurance is expensive. But if you compare the cost of insurance with the risk you are taking on yourself and your family, who is least prepared to handle an emergency, it is worth considering”.

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Printable version | Jan 27, 2021 3:57:25 PM | https://www.thehindu.com/news/cities/mumbai/business/indian-millennials-save-to-travel-abroad/article7943829.ece

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