AS the industry slowly opens up, uncertainty remains over the effect of COVID-19 on travel insurance.
Prior to the pandemic, travellers would often rely on the most basic insurance available, i.e. the cover provided by the cheapest policy or the ‘automatic’ insurance provided by the bank card used to make bookings. But this will likely change in the future.
Pascale Albrecht, Nedbank’s head of commercial card services, said in a press release: “Most corporate travel insurance policies include the option of standard cancellation as well as 'unspecified' cancellation benefits. However, these optional benefits come at additional cost. And while many corporates historically would have chosen to leave many of them off to save on premiums, it is likely that they will be thinking twice before doing that in the post-Coronavirus world.”
Pascale said the same was true of the insurance typically automatically included when corporates purchased travel tickets using their corporate cards. “These insurance offerings differ vastly from one card provider to the next. And while it previously may have been sufficient to simply accept that you have a measure of insurance cover when paying with a card, COVID-19 has brought home a strong message that this approach to travel insurance is more than a little risky.”
Anrieth Symon, head of travel at Bryte Insurance, told Travel News that customers often targeted the cheapest travel insurance option, believing that the ‘unusual’ or ‘unprecedented’ was unlikely – but COVID-19 has flipped this on its head. “Never has it been more important for customers to have a comprehensive understanding of their insurance cover, and to be aware of precisely what may be covered and excluded. This is why we strongly encourage customers to take responsibility for familiarising themselves with their insurance policies. We also encourage customers to choose their travel insurance cover more carefully. While cost is important, it is far more important to select cover that will speak to their individual needs.
“Because top-up insurance has become so important for customers relying on the travel insurance offered by a credit card provider, we have designed bank-specific optional top-up products to supplement the automatic cover available to bank customers. We continue to collaborate with our bank partners to provide cover specific to their customers’ needs, while appreciating that circumstances continue to evolve at a rapid pace and that we may need to continue to evolve our offer too. We believe that top-up travel insurance will be a significant trend going forward – especially in a world where the unprecedented has become the ‘new normal’.”
Uriah Jansen, md of Oojah Travel Protection, told Travel News that she believed the way travellers viewed travel insurance in the past would change. “Travel Insurance was viewed as a grudge purchase, in case something happened, or if they needed travel insurance to obtain a visa. The pandemic has confirmed the need for adequate travel insurance. We have reimbursed a large number of travellers who qualified for the ‘cancel for any reason’ benefit, however we are aware of a large number of travellers that suffered financial losses because they relied on ‘free’ or ‘basic’ travel insurance.”
Oojah launched a COVID-19 product in direct response to the pandemic. Uriah said: “This product will be improved even further once we open our borders to international travel, to ensure travellers can plan and travel with peace of mind.
“Going forward, travel insurance should be viewed as the first item travellers purchase when they plan their trip. It always remains the traveller’s choice, but travellers should be made aware of the risk of using ‘free’ or ‘basic’ cover.”
