Dishonest Foreign Insurance Agents Are Robbing Nepal’s Tourism Sector

KATHMANDU, JULY 7

In recent days, there has been a surge in dishonest foreign agents and agencies subordinate to them, taking advantage of the country’s unclear or non-existent tourism policy at huge cost to the local industry.

Despite a steady recovery from the pandemic-induced slowdown, most global insurers have begun cutting back on local agency work while handing over foreign sub-agencies to oversee operations in Nepal, according to industry insiders. Some have even begun overseeing their own operations.

“While the change is understandable, it could jeopardize what local stakeholders have achieved over two decades,” the source said.

“With the entry of foreign sub-agents and operators into the market, local agencies will have to go through the same difficulties and abuses they faced in the beginning when foreign sub-agents delayed payments for rescue and medical claims,” the source explained, further claiming that some such incidents have already been reported. Local operators have complained that foreign agents of insurance agencies, including Pinnacle Assistance, Traveller Assist, Inherent Risk and Global Rescue, have been ripping off Nepal’s travel and adventure industry for a long time.

Mingmar Sherpa, CEO of Seven Summit Treks Pvt Ltd, accused Global Rescue of failing to pay over $80,000 in insurance compensation to its clients.

“They challenged us to sue them instead of paying compensation for rescue operations, even in cases involving rescue and treatment of extreme frostbite for some of our clients,” Sherpa testified.

“Insurance companies used to make direct payments, but now that a sub-agency is overseeing the work on their behalf, delays and non-payment of claims have become recurring problems for agencies here. As a result, the future of the entire tourism sector is at risk,” he added.

Moreover, Ramesh Thapa, former president of Nepal Association of Travel Agents (NATTA), highlighted that the insurance costs of many tourists coming to Nepal have increased in recent years and called for the introduction of stricter regulations and adherence to international standards to restore confidence and stability in the helicopter rescue sector in Nepal.

In light of the changing times, local stakeholders have emphasized on introducing appropriate policies and regulations along with the necessary infrastructure to address the issues seen in the local market

“The government should develop proper guidelines for local agencies to operate as regulated entities in the country, require them to operate 24 hours a day to respond to emergency calls, and also have professional liability insurance in line with international standards,” the source told THT.

Sherpa, on the other hand, opined that it was high time that local authorities started providing travel insurance to tourists in accordance with the rules and regulations set by the Nepalese government to remove such insurance hurdles, which in turn could help tourists get a favourable insurance package at a lower price than the foreign competitors and also generate additional revenue for the country.

It is also worth noting that international media outlets reported on numerous local travel agencies, helicopter companies, and hospitals colluding in 2018 to defraud rescue agencies and insurers with false claims, a case that was later investigated by the Nepalese government.

“While several travel-related businesses were summoned, they escaped unscathed and the 2018 guidelines on search, rescue, treatment and monitoring of tourists were later lifted, allowing such practices to continue unhindered. This is another factor behind the change in the market and should be taken seriously by stakeholders and concerned authorities,” the source said.

Meanwhile, Sherpa said the change was a result of foreign insurers’ interest in overseeing their own operations here, rather than a lack of trust in local agencies. He also shared that after the government took action a few years ago, such incidents have not occurred as often. “I personally have no information about any fake rescues being carried out recently and no formal complaints or cases have been filed against anyone yet,” Sherpa added.

In a brief conversation with THT, Rakesh Gurung, director of the climbing section in the Department of Tourism (DoT), said the department is looking into the matter. He did not respond to repeated queries

he then called and sent messages asking for further clarification on the matter.