The evolution of cruise cover

Pushing the envelope

Even if the older market is more dominant, there is no doubt that cruise companies are working towards making cruising more attractive for younger and more active travellers. But, as insurers point out, more excitement may mean higher risk and not all 'adrenaline activities' are limited to younger cruisers. In fact, both ends of the age spectrum may pose challenges for assistance companies and insurers.

The good news is that younger cruise travellers seem to understand the importance of insurance cover for their trip, though. “Year over year, we’ve seen a 25-per-cent increase in travellers of all ages buying travel insurance specifically for cruise trips and a whopping 61-per-cent increase in millennials purchasing policies for vacations involving cruises,” says Hummer.

Which is good news, as the risks for younger cruise passengers are just as pressing as those for older travellers. “Younger travellers are prone to some slightly bizarre things, especially when alcohol is involved,” commented Huet.

Statistics bear her out. The average age of a passenger going overboard from a cruise ship is 41, states Cruisemapper, a specialist website. Most such incidents involve males who are ‘either drunk, on drugs or engaged in tomfoolery [such as] climbing between staterooms [or] playing on railings’, Cruisemapper claims.

“Alcohol is a problem for older people too,” Huet noted, citing 'slips, trips and serious fractures as a result of one nightcap too many'. “This is impossible to retrospectively detect or decline a claim for,” she said. Such accidents are often the start of some of the largest claims.

“Minor accidents cause some really big issues. Slips in showers, tripping over door-wells, trapped fingers in self-closing doors, self-administered non-prescription medicines that create havoc with prescription medicines, have triggered some seriously big claims,” said Huet. “These seemingly small events cascade into life-threatening situations when they impact on pre-existing medical conditions. But then that's what travel insurance is for.”

Problems arise, however, when the activities on offer are not actually covered by travel insurance. As Jenna Hummer, Public Relations Director at Squaremouth, a US travel insurance comparison website, points out: “Cruises are offering a wider array of adventure and hazardous sports activities not covered by standard travel insurance policies such as on-board simulators, bungee jumping or rock climbing walls, and water and land sport-related activities such as scuba diving, jet skiing, and zip-lining.”

Huet agrees: “Onboard facilities for the most active can push the boundaries in the standard activity lists that accompany most retail travel policies.” The so-called 'Arctic Challenge' offered to guests on some polar cruises is a case in point, she says. “It's a timed 60-second dip in extremely cold sea water – it's possible that a fit young 20-something can cope with this, but that's not the audience on Arctic-bound ships, with their declared age-related pre-existing medical conditions listing cardiovascular conditions and some BMIs well over 30, yet this is classified as swimming – and what policy doesn't cover swimming?” 

The global cruise industry has more than 100 ships on order for delivery in the next few years

Also on the risk radar are outbreaks of onboard illnesses, and bigger ships mean bigger outbreaks of on-board diseases, claims Huet. “Ten years ago, we saw far fewer claims for gastroenteritis, because cruise ships over-compensated their passengers. Now, with bigger ships and bigger outbreaks when they happen, they can't afford to do this. We now see a significant increase in gastroenteritis claims, not only in frequency, but also the cost we have to settle. Ten years ago, the cost [of such a claim] would have been below US$1,000. It's now rarely below $6,000 per person. Is this a new cost centre? It's certainly not a cost-contained environment for insurers,” she said.

After a significant outbreak, a ship must be completely sanitised in port, delaying its next departure or forcing cancellation at short notice. “Cruise ships are quick to offer a replacement cruise and free onboard spend, but they won't cover all the extra costs a traveller may have incurred and they won't offer to refund the travel insurance premium,” Huet said.

Pneumonia and other respiratory infections are also prolific claim inducers, she adds. Community-acquired pneumonia can generate much higher claim costs than norovirus, Huet says, as passengers are often quickly offloaded into a hospital, then treated and repatriated. “By the time antibiotics have been administered you stand no chance of requested blood tests to detect the vital source.”

Trouble ashore

Resolving claims arising from incidents ashore can be complex. Cruise lines stand accused of trying to pass on responsibility to the local excursion company operating the tour, even when it may have been purchased on board or through the cruise line at the time of booking the cruise. Cruise companies may try to evade liability by claiming that the land tour operator is completely independent. Maritime injury lawyers, however, have successfully argued that in some cases the operator was acting on behalf of the cruise company or in a joint venture in which most aspects of the contractual relationship were under the cruise line's control.

“Most cruise passengers are lulled into a false sense that they are on an idyllic vacation to a tropical destination where nothing can go wrong and they instinctively let their guard down while on their dream vacation and this leads to not recognising signs of danger,” says Jim Walker of Miami-based maritime law practice Walker & O'Neill. He points out that a number of popular cruise destinations close to the US have very high rates of violent crime. In fact, he says, 99 per cent of onshore crime incidents that lead cruise vacationers to contact his firm occur during shore excursions in Caribbean ports. “We continue to receive enquiries from passengers who have been victimised while ashore, almost exclusively during cruises to the Caribbean,” he stated.

Take better control

Yet too many passengers still travel without adequate cover or any cover at all. “Around two out of three clients we represent do not have travel insurance,” said Walker. “Many accidents turn into nightmares because vacationers have not purchased insurance. Many of our clients thought ‘this could never happen to me’.”

A huge part of cruising's appeal for many (especially older) passengers is a holiday experience that begins at a port in their home country and does not involve the stress of flying. But according to Dr Lynn Gordon, Chief Medical Officer at UK-based assistance provider CEGA, that can lull some cruisers into a false sense of security. Also speaking at the recent ITIC UK event, Dr Gordon warned of a 'basic lack of understanding' among passengers regarding the risks inherent in cruise travel. “Just because they are getting on a ship in Southampton, for example, passengers may think they are in safer hands,” she said. “The perception tends to be that because I’m not flying anywhere, I am fine to go – I wouldn’t dream of flying uninsured but will go on a cruise,” she said.

Should cruise companies insist on seeing proof of adequate medical and evacuation cover before allowing passengers to board? Operators in some specialist sectors of the cruise industry already do so, as do most companies selling their products in European markets. “In the UK and in most EU countries, you can't get your tickets until you can show that you have insurance in place,” says Lingard.

One such example of a specialist cruise company is Freighter Expeditions, a Sydney company that specialises in selling cruises aboard long-haul cargo vessels. Julie Richards, advisor and cruise master at the company, told ITIJ: “We have been selling cargo ship travel for over 20 years and you must have this [insurance cover].” 

However, destinations are also putting their foot down when it comes to demanding proof of cover. This year, notes Richards, New Caledonia, a popular cruise stop for Australians, became the latest destination to require passengers going ashore to show proof of adequate medical insurance and repatriation cover. “I guess they are tired of having to keep clients who do not have evacuation cover in hospital in Noumea,” she said.

Onboard facilities for the most active can push the boundaries in the standard activity lists that accompany most retail travel policies

Other destinations that may specifically require cruise travellers be insured before they enter include Austria, Belgium, Cuba, Denmark, Finland, Germany, Hungary, Iceland, Lithuania, Malta, Netherlands, Poland, Qatar, Russia, Sweden, Switzerland and Turkey, according to Squaremouth's Jenna Hummer. 

Mainstream cruise lines usually ask if customers have travel insurance, even if they don’t insist on it as a prerequisite to travel, and even if the law prohibits them from making travel insurance mandatory, as in the US, for example. “When booking a cruise, whether it's through the cruise line directly or through a travel agent, customers are asked if they have travel insurance or not,” says CLIA's Charlotte Humphrey. “If they have not, they are asked this again before embarking on their cruise.” 

Huet confirms this but provides a warning: “The cruise industry [in the UK] now does routinely ask all passengers to provide the emergency assistance company number and the name of the insurer before ticketing. The problem lies with not checking that the insurance is adequate. The entire travel and insurance industries need to educate consumers far better about what the risks are and what sort of costs a cruise traveller could realistically face if it all goes horribly wrong.”  

With regards to the adequacy of some cruise policies, it seems not all is plain sailing. Under particular scrutiny are policies provided by the cruise lines themselves. Although many cruise lines now offer their own policies, some in the insurance industry compare some such policies unfavourably with the broader market, according to Jonathan Breeze, CEO of AardvarkCompare, a US-based online travel insurance comparison site. Cruise lines have also been warned to ‘take better control’ of ‘excessive charges’ to insurers by onboard medical facility providers, says Huet. “If they don't,” she said, “insurers will take a view and refuse to insure some of the most loyal and frequent cruisers.”

There are certainly many loyal and frequent cruise customers all over the world and whether insured adequately or not, the risks remain the same. There’s some good news in this regard, though. As Charlotte Humphrey of CLIA pointed out: “More people are cruising than ever before, while incidents continue to decline. From 2009 to 2018, the industry's capacity has grown by 55 per cent. During that same time, the overall number of operational incidents declined by 37 per cent.”

And, the CLIA pointed out, norovirus outbreaks at sea are statistically rare. “A cruise passenger has about a one in 1,500 risk of getting laboratory confirmed norovirus during a shipboard outbreak,” the organisation claims, citing figures from the US Centers for Disease Control and Prevention National Outbreak Reporting System.

All indications are that cruising will continue to grow and will attract an ever-widening range of age groups. Accidents and outbreaks of illness on board and incidents ashore will always occur and will inevitably attract a disproportionate level of media coverage – part of the price that cruising pays for the image it projects. Policies that cover cruise passengers of virtually all ages and for all but the most extreme activities are on the market. The challenge is, as always, persuading punters to buy a policy that gives them the cover that's right for them – and to take some responsibility for their own behaviour on board and ashore. Going easy on the complimentary rum cocktails might help.