This article was produced in partnership with Solution Underwriting Agency
Corporate travel is back, with new wrinkles in the post-pandemic era.
“We are seeing a trend in the uptake of people travelling again whether that be business or leisure purpose,” said Emily Dickens, accident and health underwriter at Solution Underwriting.
Solution has a front row seat to how business travel patterns are changing with its specialist accident and health line busier than ever. This is driven by a sharp uptick in business travel after the disruptions caused by COVID, with Global Travel Business Association (GBTA) data showing a 23% on-year increase in business travel spend in Australia in 2023.
COVID and the higher costs of getting caught out away from home without adequate coverage have also made Australians more conscious of travel insurance.
“The increase on policies continues to grow as people are travelling again, more so than ever,” said Dickens.
But while the volume of travel may have returned to pre-COVID levels, it isn’t a case of back to 2019.
A recent survey of 500 Australian business travellers showed that nearly 28% of employees were interested in adding on leisure activities to a business trip, partly as a way to counter burnout.
“We have seen this before but probably not as frequently – since travel has resumed, we have seen a large factor of leisure coming through wanting to be included under a Corporate Travel Policy product,” said Dickens.
This is part of a global trend that has seen a significant jump compared to levels for such travel pre-pandemic. GBTA surveys show that 62% of business travellers are more frequently blending business and personal travel than they did in 2019, with 42% adding additional leisure days to their business trips – and those in the Asia-Pacific region have a higher propensity to combine business and leisure travel than people from other areas.
Solution Underwriting accident and health national manager Clinton Hall has noted a particular propensity within this trend for business travellers to tack on a cruise. The Tourism and Transport Forum (TTF) 2024 Cruise survey showed 26% of Australians intended to go on a cruise this year, up from just 7% last year.
This kind of combined trip can be a tricky area for corporate travel insurance in terms of coverage.
“We have since late 2023 had to put some caveats around cruises to ensure that these are declared given the intent of the Corporate Travel product is to primarily cover business trips/travel,” said Hall.
“We have recently launched new Proposal Forms as we need to ensure we are collecting relevant information to understand a clients travel patterns especially with the rise again of private leisure travel. Without this information it could affect our decision whether to accept a risk.”
It often comes down to the fine print.
“At times it can be hard to define the difference between the business and leisure declared component especially when the insured persons may now be deemed as ‘working’ whilst travelling,” said Dickens.
“I think the market has adjusted well with this and insurers rate the trips accordingly by looking at the duration and asking additional questions, for example, what part of the trip is business and the duration and what part of the trip will be part leisure.”
Underwriters like Solution need to consider the risks involved in any extracurricular activities.
“We have added specific questions in terms of Cruises and Snow Sports to determine if these fit within our underwriting guidelines/appetite and whether we are prepared to provide cover,” said Hall.
He adds that in some cases, it may be better for clients to consider taking out pure leisure travel policies.
“Claims can affect their insurance premium on their business policy whereas one off leisure policies tend to not specifically ask if you have had prior claims. Furthermore, pure leisure travel policies tend to be cheaper in price given that they are designed specifically for the leisure travel market.”
Some companies have fully embraced new styles of working and Australia is no exception to this trend. Government statistics showed that last year 37% of Australians worked from home some of the time compared to 34% of workers globally.
This has naturally impacted the corporate travel market.
“We have seen some policies lapse due to no travel planned, therefore some businesses in some circumstances have adapted to hosting meetings virtually via Teams/Zoom and subsequently have eliminated the cost of travel to their business. However, these tend to be smaller organisations that already had limited travel planned and therefore in general face-to-face interaction is still preferrable as gives us that human connection that can’t be provided by remote communication,” said Hall.
Some reports suggest remote workers still need to travel for work, as a new phenomenon known as ‘super-commuting’ arises in the post-pandemic world.
With employers now much more likely to have staff based away from the office or even overseas, these staff sometimes require the occasional in-person office visit.
A Deloitte survey unveils the financial dynamics behind this phenomenon, with relocated employees embarking on more trips to company headquarters, 70% of which are company-funded. Ironically, being away from the office much of the time has reinforced the need for face-to-face meetings in the minds of many.
Indeed, nearly three-quarters (73%) of Australian business travellers believe that in-person meetings are essential for long-term business relationships, and 47% feel that business travel has become more important since remote work became widespread.
New patterns and attitudes toward business travel are being slowly incorporated into policies as underwriters such as Solution gauge the impact and likely longevity of each phenomenon. It is a time fraught with the higher possibility of a situation falling through the cracks, and one where expert advice is thus at more of a premium.
“[It] is still hard to determine what trends we will see over the next five years given the ever-changing environment in the A&H space,” said Hall.
The largely unforeseen global pandemic is an illustration of how difficult it can be to accurately forecast travel insurance trends.
Another resultant change at Solution is the coverage of COVID under specific sections of their corporate travel product, which will become important if COVID claims become a trend again. It also staves off the possibility of customers letting policies lapse during an uptick in cases as they did in 2022-2022.
While the numbers of people travelling are back at pre-COVID levels, the impact of COVID on the currents within that surge still continue unabated – and the jury is still out of whether many of these trends are here to stay or not.
“We are still in the phase after COVID in terms of travel and it will be interesting to see if this will settle, especially in terms of private leisure travel,” said Hall.
With a market both resurgent and in flux at the same time, keeping abreast of risks is essential to ensure customers are protected.
“Educating brokers is key to them understanding what the products are designed for [so that they can] in turn educate their clients.”
Solution Underwriting is a thriving and innovative agency committed to fostering a positive and diverse culture, service-driven attitude, and genuine relationships within the insurance industry. Solution prides itself on its flexibility and pace, tailored quality coverage and first-class local and London security. It provides a range of financial lines, general liability, legal expenses and accident and health products to brokers nationally, and with offices in Melbourne, Sydney, Brisbane and Perth and over 50 employees, Solution has positioned itself as a leader in the SME space.
