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Saturday, April 13, 2024

Travel insurance changes could impact the insurance industry, says GlobalData

Following the news that LV= has stopped offering travel insurance and Aviva has altered its travel offering to exclude travel disruption following the spread of coronavirus across the globe;

Daniel Pearce, Senior Insurance Analyst at GlobalData, a leading data and analytics company, offers his view:

“According to GlobalData research, trip cancellation was the second most popular reason for claiming on travel insurance in the UK pre-coronavirus, so it is understandable that insurers are looking towards mitigating their exposure to claims, particularly given the rapidly evolving landscape they are facing.

“However, these actions will do little to comfort consumers who would of course be looking towards insurance providers to help limit the financial implications they face from the prospect of cancellations. There is some good news for travellers, as at present this is not an industry-wide movement, but given how quickly travel advice is changing more insurers could follow suit as potential losses increase.

“GlobalData’s 2019 Insurance Consumer Survey indicates that single-trip policies were by far the most popular choice in 2019, with 61% of individuals who purchased cover before their trip opting for this type of policy. With such a high proportion of consumers purchasing single-trip policies, the implications of changes to policy exclusions could have a long-standing impact on those who may need to purchase cover for future travel.

“Consumer sentiment will also be negatively impacted in the long term, as insurers have also stated that other insurance products – such as business interruption – will not cover against losses attributed to coronavirus. The industry will undoubtedly have to work hard to rebuild consumer confidence or face the prospect of longer lasting impacts.”

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