Travel insurance
regulatory environment can shape not only product and/or price, but also how products are sold and distributed. Different market segments tend to utilize
AIG Travel’s benefits for different reasons, Rutledge adds. For example, in the U.S., the principal driver for leisure travelers is the trip cost and the financial risk associated with a cancellation. However, outbound Japanese leisure travelers, for instance, are typically more concerned about accidents or medical coverage and assistance when they are traveling abroad. “On top of these patterns in the leisure
segments, the corporate segment is displaying an ever-increasing emphasis on employers wanting to protect the safety and well-being of employees who travel for business,” he says. “As a result, more emphasis is placed on medical and security services for this sector.” Following several anti-travel agent stories
regarding travel insurance sales in Consumer Reports magazine last year, such as the selling of policies with limited coverage and the limiting of options because of commission priorities, Eben Peck, senior vice president of government and public affairs, addressed in a letter to the publication that insisted that what they wrote was not true. “Travel insurance plans offered by travel
agencies may be customized for a certain traveler or risk profile, but these are comparable to other plans in the marketplace, and offer a full suite of benefits and coverages,” he wrote, adding that the travel agency channel represents over half of all travel insurance distribution. “Most travel industry attorneys recommend that travel agents offer insurance or obtain a signed waiver with every travel sale, as does ASTA.”
Case studies
Alaska Air Linda de Sosa, vice president and senior travel consultant at Woodlake Travel in Houston, suggests asking the following questions when evaluating policies: 1) Does the policy cover pre-existing conditions? Many cruise line policies don’t. 2) Does it pay medical expenses primary or secondary? Primary means they pay when required, which is excellent — otherwise, you might need to put up a huge credit card charge to guarantee payment to a hospital before they’ll let you leave. Secondary means you submit it to your policy first. “Insurance has supported my clients who have lost passports and had to stay
on to get them replaced; helped them buy clothes while waiting for lost suitcases; aided them with misconnects; and advised one client which hospital to go to when she got ill in Moscow,” says de Sosa.
Hawaiian Airlines At the end of last year, CSA Travel Protection, which is now selling consumer plans as Generali Global Assistance (GGA), forecast that technology will continue to be the major focus for the travel insurance industry, with mobile technology expanding in the next year or two, while providing proactive travel assistance. Geo smart mobile apps can help insurance companies identify when a traveler is in an area that has been affected by an event or catastrophe and proactively reach out to see if they need help. It can also be used to remind travelers before they depart about the insurance services available to them and to suggest options and make it easy for them to perform tasks. For example, it can help travelers to reserve and book travel arrangements, purchase tickets to special events and theme parks and make last-minute itinerary changes.
Top trends
1. The most popular choice of travel insurance coverage is trip cancellation/interruption benefits, and most Americans are likely to buy insurance for trips to more exotic destinations and cruises.
2. Any time there are external events which impact travelers, such as Ebola, Zika and high-profile terrorist events, generally, the insurance industry sees a considerable increase in inquiries and sales.
3. When the economy is doing well — and the Consumer Confidence Index is currently quite high — this translates to travelers being more comfortable spending money on
travel, which leads to more travel insurance sales.
4. In 2016, approximately 43 million people purchased travel insurance in the U.S., an increase of 24 percent since 2014.
5. As a rule of thumb, the older the traveler, the less likely their travel plans will be changed due to world events, such as civil unrest and virus outbreaks. Women are also somehwat less likely to change their plans than male travelers.
Source: U.S. Travel Insurance Association (from two surveys released in 2015 and 2017)
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