After nearly 20 months, Australia’s international border opened about three weeks ago. For travel insurers and their clients, what does this mean? And what has come out of that lockdown period?
“What it means, basically, is we’re finally seeing some sales come through,” said Cover-More group chief executive Cara Morton (pictured), who herself is travelling to Europe next week on business. “In the last few weeks, we’re seeing volumes of probably around 25% of what they were in 2019.
“But what we’re really seeing is higher attachment rates, so more people taking insurance when they travel. Every conversation that I have in the market – whether it’s Australia or the United States or Latin America – all evidence points to much higher attachment of insurance or insurance-type services to travel, so there’s much more focus on people making sure that they’re protected.”
Sydney-headquartered Cover-More, which is part of Zurich Insurance Group, operates in 22 countries across five continents. Key sales at the moment, according to Morton, are to the US, the UK, and Fiji.
“That’s where we’re seeing the most demand because that’s where, really, the international routes are open to,” noted the CEO, who has been at the helm of the travel insurance and assistance provider since June of last year, initially in an interim capacity.
“It’s quite challenging to travel, though – the tests that you need to undertake, what certificates you need printed out to be able to eat in restaurants in Switzerland, for example. So, with that and of course the extra cost that a family travelling to, say, North America adds, I think we’ll continue to see a steady increase [in sales] but not a real spike.”
Outside volumes, there have been changes to the actual travel insurance policies, as well, in response to the global pandemic. In Morton’s view, they’ve done right by adding COVID-19 coverage.
“In December 2020, we introduced COVID benefits for Australians travelling to New Zealand,” she highlighted. “And we cover medical expenses for COVID, right from the beginning of the pandemic. Cover-More also covers cancellation of your trip if you are diagnosed with COVID. Basically, we have a lot of COVID coverage now.
“Really, the only thing that it doesn’t cover is border closures, but we believe that that’s going to be a lot less now because of the vaccination rates across the globe. And if we had to cover that, because it’s just so difficult to model, we would put travel insurance out of reach for many Australians, which is obviously not what we’re trying to do.”
As for the insureds, there’s one particular change that Morton has observed.
The CEO told Insurance Business: “People are asking a lot of questions. I think that’s one of the things that we’re noticing across the globe, like I’ve noticed this in North America and Europe as well – that people are spending a lot more time talking to people on the phone like customer service, and really understanding what’s covered and what’s not. Whereas in the past, they didn’t do that.”
Given “all this uncertainty now,” the CEO believes people will be turning to insurance a lot more to give them certainty that they will be looked after when they travel again.
“I think there’s a lot more transparency required,” she said, “and we have spent a lot of time during this pandemic on transparency and looking at what the customer really wants. We’ve gone back through two years of history around complaints and looking at what people claim, and we have revised our policies and got on top of what the customer wanted.”
Morton went on to state: “Something that I’ve spoken about since the beginning of COVID, is that we’re going to need to be a lot more agile around product development. WTP (World Travel Protection), our global assistance arm, we have medics in that organisation and they informed us really early on that [COVID] was going to be around for a long time.
“So, it’s living with COVID, not when COVID’s over, and we’d started developing a product really early on. And there’s a genuine need to take care of people and make sure that they have the right coverage when they travel – it’s not just about another sale.”
