One of the more interesting businesses in White Mountains Insurance's (NYSE:WTM) portfolio, PassportCard and DavidShield provides insurance to foreign travelers in case of medical mishaps abroad. Here's what this business does and where it could go from here.

A full transcript follows the video.

This video was recorded on June 18, 2018.

Michael Douglass: Turning to another of their insurance-focused businesses, let's talk about PassportCard and DavidShield. You may have heard of PassportCard and DavidShield, perhaps. PassportCard is for travel medical insurance, and DavidShield is for expats medical insurance.

My wife works in the travel industry and we love to travel. We have not personally worked with PassportCard or DavidShield, but we're familiar with some of the issues. You go to a foreign country, you break your leg. Things happen, right? The problem is that, with a lot of travel medical insurance, it can be a pretty painful process. You go to the hospital, you pay out of pocket, you're hoping to get a reimbursement two, three months down the road. That's not really a fun experience.

What they've done with PassportCard is, they load the card with the copay. You give that to the hospital, they take their cut, and then everything else has already been pre-negotiated, as long as you work within their network. Then, you don't have to do that reimbursement later. There's nothing more out of pocket for you. Which, if you're traveling on a budget, a really attractive thing.

Also, I have to say, it's a really interesting business with a lot of growth potential. They're annualizing it just over $100 million in premium. They're still pretty small. A majority of the business is in Israel. They just expanded to Australia. They're planning to expand to Canada, Great Britain, Germany in the near future. They're a small fish in a $20 billion market, and they grew over 30% last year.

Their model, as well -- and this is something that you'll see a lot with White Mountains' work across the board -- they're mostly fees and pass-through to insurers. They're not retaining any risk. What they're doing is just getting fees and commission from the actual insurance carriers who are underwriting these policies.

Matt Frankel: Yeah. This business definitely has a lot of potential over the long run. Like you said, it's a pretty small piece of the pie right now. But, as you said, they're planning to expand into a few countries going forward. The fact that it's fee income takes the risk out, but it makes for a less exciting business than if they were actually the insurer themselves here. It's definitely a high-potential business, and I'm curious to see where this goes over the next five, ten, 20 years.

Douglass: Yes. Travel in general is a really interesting space.

Matthew Frankel has no position in any of the stocks mentioned. Michael Douglass has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.