Travel insurance


Make the most of insurance O


Travel insurance represents a potentially lucrative opportunity for agents, if they can stay on top of global uncertainties. By Robert Carlsen


n a recent U.S. State Department travel notifications list, 21 countries were under a travel ‘warning’ level,


which indicates that travelers should consider very carefully whether they should go to countries at all. Meanwhile, all of Europe was under a travel ‘alert’, which includes short- term events such as an election season (with strikes, demonstrations or disturbances), a health alert or evidence of an elevated risk of terrorist attacks. What all that says, essentially, is that travel insurance is seeing a considerable increase in sales because of global uncertainties. “Tere are definitely more high-profile


terrorist acts,” says Megan Freeman, executive director of the U.S. Travel Insurance Association (UStiA), a non-profit national association of travel insurance carriers founded in 2004 and based in Rockville, MD. “Generally, any time there are external events that impact travelers, the industry sees an increase in inquiries and sales.” UStiA reported that Americans spent nearly $2.8 billion on all types of travel protection in 2016, covering 42.6 million people, with more than 32 million plans provided by UStiA members. Consumers purchased them through distribution channels such as travel


suppliers, travel agents, travel insurance providers, internet aggregators and brokers. Te number of people covered has increased by 23.7 percent from 2014, the last time the association conducted a travel protection market study. “In considering purchasing travel


insurance, a traveler might want to consider the potential out-of-pocket expenses they would have to otherwise cover in the event that something occurs,” says Freedman. “For example, if you had to cut your trip short due to your illness or that of a family member, could you afford the cost of another plane ticket? If you had to be medically evacuated (which can easily cost $50,000 to $100,000) or had to pay medical bills out of pocket, could you afford those costs? Or, if your flight is delayed and you have to book a hotel room for a night, or your luggage is lost and you need to replace essentials, could you cover those costs out of pocket?” Freedman adds that accidents can happen


to anyone while traveling, especially to age groups which may be more active. Extreme weather, natural disasters and airline delays are the types of occurrences UStiA members are familiar with, and these, combined with consumers’ desire to protect their travel


investment are driving the increase in plans purchased and people covered. Regardless of how many new travelers have


embraced travel insurance, there are still multiple misconceptions about what coverage is needed and what it will do. UStiA’s 2012-14 survey released in 2015 showed that more than half of respondents (53 percent) assumed they were not covered for trip cancellation, medical attention or lost baggage. However, the 47 percent who assumed they were covered believed they were covered through their personal or group health insurance — insurance benefits provided by their credit card, the airline/ cruise line/tour operator, or their homeowners’ insurance. UStiA says that travelers need to ask


themselves three questions: 1) How much can you afford to lose if you have to forfeit all or part of your vacation because of illness, natural disasters and other concerns? 2) What happens if you become ill or injured while traveling? and 3) Will your airline or tour company, etc. refund your money if a sudden illness forces you to cancel at the last minute? According to two recent Chief Marketing Officer (CMO) Council/Geo Branding Center/AIG Travel surveys, despite our ▶


ASTAnetwork | Fall 2017 | 47


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