Hanoi-based digital insurer OPECS Insurance JSC on Monday, March 18, officially launched its digital insurance products, including the new flight delay coverage.
These products are integrated with technology so that they and other non-life insurance services can reach clients directly without involving intermediaries such as insurance agents.
The flight delay insurance is expected to attract the most clients. Three hours before departure, clients who have already installed the OPECS app will be able to purchase in-app coverage for VND39,500 (US$1.7).
If the flight is at least 31 minutes late, the insurer will reimburse them up to VND150,000 (US$6.4). In case the flight is delayed for four hours, the client will receive VND1.5 million (US$64.6).
OPECS is not the first insurance company to penetrate this market segment. In December last year, another Hanoi-based insurer, INSO Vietnam JSC, introduced flight delay insurance, compensating their clients with VND1.6 million each if their flights were delayed by six hours.
This method of competition, called Insur Tech, is an emerging sector. Since 2017, some firms in Europe have boosted the sector by launching new products, transforming the delivery of insurance.
Flight delays open doors for insurance firms
Local airlines have to inform passengers if their flights will be delayed by 15 minutes or more, according to Circular 27/2017 on the quality of passenger services at airports and Circular 14/2015 on nonrefundable advances for air transportation, both issued by the Ministry of Transport.
Airlines have to serve food to passengers depending on the length of the delay. For example, airlines are obliged to provide passengers drinks for flights delayed for two hours, food for delays of three hours and accommodation for a delay of six hours or more for flights scheduled from 7 a.m. to 10 p.m.
The ministry also regulates different compensation levels for domestic and international flights based on the distance being travelled.
The compensation rates for a cancellation or delay on domestic flights range from VND200,000 to VND300,000 per passenger on routes below 500 kilometers and 1,000 kilometers, respectively, and VND400,000 for routes from 1,000 kilometers and above.
For international flights, the compensation rate is $25 per passenger on a flight of less than 1,000 kilometers and $150 on a flight of over 5,000 kilometers. The compensation can be made in cash or transferred to the passenger’s bank account.
However, airlines can be exempt from compensation obligations if the trip is delayed due to weather conditions or technical or security reasons. Airlines are likely to spend modest amounts of money on flight delay compensation.
This has created ample opportunity for insurance companies to establish a firm foothold in the niche market segment.
https://english.thesaigontimes.vn/67000/another-insurer-introduces-flight-delay-insurance-plans.html
