Double dipping
Unnecessary helicopter evacuations from Nepal continue to be a problem for insurers, which are having to deal with paying over the odds for helicopter flights for their insureds
There are several issues at play here: trekkers faking altitude sickness (or being told they have it) in order to get a helicopter to pick them up and drop them off at the airport / hospital; helicopter operators inflating flight hours to gain more money; and guides of trekking companies gaining commission payments as a result of calling for the helicopter evacuation of insured trekkers.
Phil Peart of Centricity, who has been out in Nepal investigating the issue, said: “We firmly believe the trekking companies are double dipping on evacuations and also not splitting costs equitably where applicable. We firmly believe … trekking companies will manufacture a way to continue to reap the benefit of the huge markup and profits skimmed from the evacuations.”
There is a way that insurers can combat the problem, though, he continued: “The only way to stop this practice is to have a consensus among all insurance companies to set up a referral hub, a silo, one point of contact for all evacuations. When the call comes to the trekking company, they notify the independent 24/7/365 call centre and they then liaise with nominated rescue companies (with contracted rates) to ensure there is no inflated pricing, cutting out the trekking companies. With a centralised hub working with all insurers, there might be a way of ensuring we obtain details of passenger loads on all evacuations, link those into a database to ensure there is cost splitting on multiple evacuations.”
Unfortunately, there are literally hundreds and hundreds of small trekking companies, which creates a problem trying to audit and make accountable all the middlemen. Furthermore, Peart makes the point that customers need to be well informed about the practices and policies, and insurers should be proactive in warning customers against the ‘free rides’ offered by unscrupulous guides.
One other way that insurers could potentially halt the flow of unnecessary flights is to go out to Nepal and meet with the rescue companies, so that claims handlers can fully understand the procedures regarding evacuations. Peart noted that during his latest visit to the region, two international insurance providers were also present visiting local hospitals and service providers.
Sadly, Peart concluded: “We do not think there will be any opportunity to recover any overbilling on the paid invoices, however we strongly suggest that all insurers seek to implement some form of contractual agreements with the hospitals, rescue, helicopter and major trekking companies in an attempt to eliminate the huge profits being gouged by the middlemen.”