The Schengen authorities have blacklisted 14 Indian insurers on the basis of inadequacies in their services. That automatically means or implies that travel insurance and medical insurance services provided by these 14 companies will not be accepted in Schengen countries. The Schehngen authority provides common visas to 25 countries. The authority has in all approved only 14 companies and has instructed travelers to take insurance only from these companies. Some of the prominent companies excluded permission to sell insurance include Religare Health Insurance and Raheja QBE National Insurance, Bharti Axa, L&T General Insurance, SBI General, ICICI Lombard. About 4% of the total premium of general insurance companies is accounted for by travel insurance.
This is negative news for insurance companies, as this announcement has been made right and just before the hectic April-May season for travel insurance sales. It is a well known fact that Europe attracts the highest number of Indian tourists during the summer season and so this news is definitely bad news for insurance companies. But, the Schengen authorities seem to have taken this decision because of the bad service standards and track record of many Indian insurance countries. An official holding a key and responsible position in an insurance company was quoted as saying that the causes for this declaration and action by the Schengen authorities included inadequate services, high claim repudiation, and insufficient IT infrastructure all of which amount to non-compliance with embassy norms.
Rejection by such a top authority could have extremely negative effects on the reputation of these companies, experts assert. It is also a fact that many, or even a lot many insurance companies have numerous complaints against them related to claims and a majority of them relate to misleading claims used while selling insurance policy. Though IRDA (Insurance Regulatory Development Authority), an agency which monitors insurance companies has initiated and begun a complaints and grievances redressal system, it is yet to become effective. Also, there were no comments from any of the affected insurance companies, except for ICICI Lombard, to this new and latest action by the Schengen authority.
