Insurers give Nepal ultimatum over chopper scammers

If our clients stop issuing travel insurance policies in Nepal, it won’t be long until other insurers do the same Jonathan Bancroft, managing director, Traveller Assist

Kathmandu, January 25

Tourists visiting Nepal will not get insurance coverage from next month onward unless the government cracks down on fraudulent helicopter rescues of trekkers, international firms warned today.

A mass pull-out by the insurers would seriously dent the country’s vital tourism industry, which just celebrated welcoming over a million tourists for the first time last year.

An AFP investigation last year exposed a racket where dodgy trekking outfits pressured tourists into needless and costly airlifts, or billed multiple times for a single flight. The government launched an enquiry in June after insurers were billed more than $6.5 million on 1,300 helicopter rescues in the first five months of 2018.

The government’s probe identified 15 companies — including helicopter firms, trekking agencies and hospitals — linked to the lucrative racket. But no action has been taken against any of the alleged perpetrators. In a letter to tourism minister, Traveller Assist, an Ireland-based company that represents international insurers, warned that unless the government brought charges against these companies by February 15 its clients would cease to issue insurance.

“To be clear, this is an ultimatum!,” Jonathan Bancroft, managing director of Traveller Assist, said in the letter seen by AFP. “Please don’t be under any illusion that the fraud has stopped. It has not. If our clients stop issuing travel insurance policies in Nepal, it won’t be long until other insurers do the same,” he wrote.

Tourism Minister Rabindra Adhikari said investigations were under way to penalise and charge fraudulent companies. “We are deeply committed to taking action against them. The government will make no compromises in this regard,” Adhikari told AFP.

The helicopter scam has become such a money-spinner that some budget tour operators are luring customers by selling treks at below cost price — knowing they can make enough profit on kickbacks when the tourists are evacuated. The trekking operators, lodge owners, helicopter companies, and even hospitals pocket the extra cash. There are also reports of guides putting baking soda — a laxative — in food to deliberately make trekkers ill and necessitate their rescue by helicopter.

In some cases, trekkers themselves opt for a quick ride home knowing their insurance will pay, while others are being scared into rescues for minor illnesses. In September, the government introduced guidelines to control fake rescues following a warning from insurers.