Travel Insurance: Where Are We Headed Next?

It’s a tought ime for travel insurance brands, as governments change their traffic light systems on a weekly basis, restricting the typical family holiday destinations, whilst offering unrestricted travel to G7 politicians, their entourage, plus wealthy people and VIP sports fans. How can brokers and insurers navigate the new normal? Is the market for mass travel insurance per trip, or multi-trip ever coming back to 2019 levels? The bigger question is will the climate change activists effectively ban long haul travel, at least for `ordinary’ people in the future?

IE magazine put together a travel special. Let’s fly Business Class to the future baby.

STAYSURE VIEWPOINT

First we fired a few questions at Ryan Howsom, CEO at Staysure;

Q.  Will mass market travel ever come back to 2019 levels?

A.  Yes, it will.  While there will be a period of recovery, there’s a lot of pent up demand for travel, as UK holidaymakers are getting increasingly impatient as their holiday plans, both home and abroad, have been disrupted for almost 18 months now.  We are seeing an increase in trips being booked for 3 week durations vs. 2019, and a slight decrease in those booked for 8-14 days, so people are making up for lost time with longer trips.  When asked, 74% of Staysure Group customers said they still intended to travel in 2021 and 83% said they will travel the same or more than before Covid-19 during 2022.

Q.  Is the climate change lobby now setting the travel industry’s T&Cs for the future?

A.  We don’t believe the climate change lobby will set the agenda, but we do believe there will be more progress on sustainable practices across tourism.  For the long term future of the destinations our customers visit, the social and environmental impacts should be assessed and then reduced to allow people to keep exploring the world or indeed, just relax on beautiful, clean beaches and swim in unpolluted seas.

Q. Do you see Machu Pichu like visitor number restrictions on destinations like Barcelona, Venice, Egypt, Jordan etc becoming the norm in future?

A.  No, the world’s economy needs mass tourism.  Well-liked tourist destinations have populations whose livelihood rely on vast numbers of visitors coming to the area.  When you proactively reduce these numbers down, you’ll do two things – (a) price the average person out of visiting, and (b) reduce the income of the people living there by a disproportionate amount.  We have to remember that around half of Staysure Group customers choose to travel to destinations like Spain, Portugal, France and Greece for their annual break.

Q.  Are you seeing people claiming on cancelled cruise ship bookings or is the cruise sector recovering after Covid?

A.  With the flexibility of the cruise companies offering alternative destinations or trip dates, plus our own flexible approach to meeting our customers’ needs – we have seen more changes to policies than claims for cancellations.  The cruise sector is aiding its own recovery by adapting regions and offering events like cruise experiences around the UK.

Q. Are people specifically asking for Covid cover that includes repatriation for all their party, or just medical treatment overseas?

A.  We’ve seen a lot of focus on the implications of catching Covid-19 before travelling in 2021.  Staysure Group Travel Insurance policies include repatriation and medical treatment as standard, plus we’ve led the market when it comes to adapting travel cover to include situations such as; customers being forced to quarantined and cancel their trip by Track & Trace, or having an allergic reaction to the Covid-19 vaccine that stops them travelling.  Staysure Group will continue to pioneer advances in cover as the world of travel changes.

JUST TRAVEL COVER INSIGHTS – CONFUSION OVER RULES, EVEN FOR 2022

Dale Robinson, Marketing Manager at Just Travel Cover offered some extra insights;

“The British public’s love of holidays has not wavered. They still crave that break – the weather and escapism, as well as family time. It is simply the restrictions that are in place (and the confusion) that has shrunk the market (by 51%). We believe people will have concerns following covid, and will look to their travel insurance for added protection. Our recent survey showed the following;”
  • 62% still plan/hope for one holiday this year
  • 32% have already booked a 2022 holiday
  • 67% would NOT travel to an amber country
  • 78% would not even book a holiday to an amber country (15% would book, in the hope it went green)
  • 85% would not travel against FCDO advice
  • Only 12% would travel against FCDO advice, even if they could get cover for it
  • 78% would NOT book to a destination where the FCDO advise against travel
  • 45% of people said testing puts them off booking holidays (once testing removed, more will travel).
  • 30% said catching Covid abroad and being hospitalised is their biggest concern
  • Second was the need to quarantine (27%)
  • 82% said Travel insurance is now more important than before covid

“So it is clear that people still want to travel, even this year. There is still a large market to address, with people booking holidays for 2022 already in the hope that things improve. Conflicting FCDO advice and traffic light system poses the biggest problem, with most reluctant to travel or even book for amber or FCDO advised against countries. People are more concerned about testing and quarantine than they were in December – likely due to ongoing confusion and the threat of hotel quarantine if country moves from amber to red, along with the instant change of Portugal. The rumours of quarantine free travel for those double jabbed provides some hope, especially for those over 50.

We feel that the key is the ability to adapt insurance policies to keep up with changing consumer demands which will provide peace of mind – the final step in the confidence to book – just like we have done already by providing enhanced Covid cover on most of our schemes, including cover for cancellation if you’re told to self isolate in the days running up to your holiday. We have also launched staycation policies, developing schemes that cater for the growth in popularity of UK cruises. ”

THE CLIMATE CHANGE AGENDA

IE approached the Sunrise Project, who campaign to stop insurance cover being written for coal mining and other high carbon usage projects. They said;

“Regarding your questions on travel insurance, we have no comment as we do not currently work or campaign in this space.”

That’s interesting, as the World Economic Forum published a piece last Novemebr that hinted at the future of international tourism. The ideology behind it is very much centred on sustainable visitor numbers, with people being persuaded to ask how their trip benefits local people, or impacts the local environment, not simply relax and have fun. Read more here. 

In some respects, green activists have a valid point about excessive tourism, even before the pandemic. Take Venice for example, which has seen damage from cruise ships, attempts to limit visitor numbers using turnstiles, and a city-funded campaign to spread the visitor numbers out into the winter months and to other parts of the city apart from the Grand Canal and St Marks Square. Venice has also banned those stupid padlocks on bridges by the way – every city should do the same in IE’s view. Read more here on Venice.

The ABI recently joined the UN Prgramme For Sustainable Insurance and that points the way for brands active in selling travel cover. Make the offer part of the virtue signalling experience and you are far more likely to survive the cull of travel insurers that is bound to follow a general, global decline, in international travel.

Business travel will probably never come back from Covid, or pass the ethical hurdle in the boardroom. A recent Op-Ed in BTN magazine covered this in detail, noting that the tough questions regarding wasteful carbon use will always be asked, now that Zoom/Teams has become the norm.

THE FUTURE IS BESPOKE & HNW

Rich people will continue to travel. They have done so throughout the pandemic and there is no sign of them stopping. By developing new products like shared private/charter jet cover, or carbon offset levies built into the product, insurers can tap into the HNW desire for travel, whilst maintaining ostensibly `green’ personal values.

Look at the UK market in a new way, in particular the cost of cancelling a family holiday in emotional terms, not just financial. In a post-pandemic world where people are facing the rationing of travel itself, those who can have a holiday will want to make sure it goes ahead, all of it; trips to adventure theme parks, the hotel, caravan or glamping accom, the travel there and back – every detail.

There will be more demand for eco tourism and in some respects this may replace the traditional beach type holiday, at least for solo travellers or couples without children. That offers new possibilities for insuring the experience elements of the trip; seeing waterfalls safely, helping out at local animal rescue centres, or restoring heritage sites or buildings etc.

It’s human nature to want to see what lies over the next hill, most of us want to do that at least once a year. The challenge is meeting the new standards set by green lobbyists for the travel industry per se, with the customer expectations of cheap cover on package holidays. Perhaps the days of £40 premiums on a family trip for two weeks in Spain are coming to an end, and maybe that’s a good thing.

About alastair walker 6524 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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