Growing awareness of the value of travel insurance as a risk management tool is boosting demand from corporate clients for policies that are truly fit for purpose in a global environment that continues to present new risks for business travellers, finds Robin GauldieDuty of care comes second only to cutting costs in terms of priorities for business travel buyers, according to a poll carried out for the Business Travel Show in London in February. Other perennial issues, predictably, included rising hotel rates and airfares. Despite the ever-present need to keep travel-related costs down, companies are increasingly aware that the cheapest off-the-shelf insurance policy may not always be the most appropriate solution for their travelling employees. So how is heightened awareness among corporate clients of the need to maintain duty of care, while balancing budgets, affecting their relationships with their travel insurance providers? “It's not surprising to see cost cutting and duty of care as the top two challenges facing buyers,” said David Chappell, Director of the event. “Given terrorist attacks across Europe and further afield, it's simply not an option for buyers to ignore traveller risk any more. It must be a priority for them, their organisations and their partners.” The findings echo a 2017 report by the UK’s Institute of Travel Management (ITM), which reported that ITM members listed traveller security as their number one priority, ahead of cost reduction and budget control. The ITM outlook
Demand is certainly increasing for business travel insurance … [creating] an opportunity for the travel insurance industry to continue to design flexible solutionsreport said that travel managers would be challenged to manage cost increases from suppliers, while being expected to rein in travel spending. Research by the Global Business Travel Association (GBTA), a trade organisation representing the international business travel industry, also indicates that duty of care is a hot topic for corporate travel buyers and their clients. At the same time, many business travellers are unaware of their company's traveller security policy, as revealed by a GBTA study released in December 2017. Kelvyn Sampson, retail, leisure and hospitality industry practice leader at Willis Towers Watson, a major multinational insurance broker and risk management company, said that the GBTA's findings underline the need for companies that wish to robustly demonstrate duty of care to do more to teach their travelling staff how to handle a crisis. “Risk assessment and preparation before travel are imperative, but it is also vital that the company travel policy outlines what employees should do in the event of an incident,” he said. “Employee responses need to be in line with the company's corporate crisis management plan, which is informed to some extent by the insurance policies that are in place. For example, if an employee is injured while on business travel they should be aware that they need to call the cover provider nominated on the company's travel insurance programme.” But the GBTA's survey of 1,050 employees revealed that many business travellers lacked knowledge of the support on offer. Almost one-quarter were unaware of the existence of their company’s policy, while only 36 per cent knew they would be contacted in an emergency. However, according to the GBTA, businesses are learning lessons about duty of care. Of those taking part in the study, 27 per cent noted that recent incidents – both environmental and terror-related – had spurred a change in their employers’ attitudes. Is this good news or bad news for travel insurers? Corporate clients are increasingly willing to accept that appropriate travel insurance comes at a price, according to some insurance industry sources.
Increasing awareness“Corporate clients are becoming increasingly aware of their duty of care to protect their staff when sending them overseas on business,” said Carl Carter of Voyager Insurance Services. “They are also becoming very aware that the 'best price' may not always offer the ‘best cover’, and in some circumstances may not even be fit for purpose, especially when their employees are travelling further afield, to hostile locations, or are having longer duration travel assignments on business.” Businesses that fail in their duty of care face ‘significant and onerous’ fines and penalties, as may individuals within such businesses,” he warns. “This is not something to be taken lightly by any employer.” Awareness of the need for duty of care is on the increase in the US, as it is elsewhere, and corporate clients appear less inclined to automatically opt for the cheapest policy available, according to Megan Cruz, Executive Director of the US Travel Insurance Association. “Price will always be an issue when purchasing business travel insurance, but there seems to be more tolerance in the market for ‘best product’ versus ‘cheapest product’,” she said. Business travel policies already offer companies a high level of flexibility, she pointed out, allowing them to tailor-make cover according to their needs: “Business travel accident insurance (BTA) is a very customisable product, so a company can choose who to cover (for example, executives but not all employees) and when they are covered, but also for how
insurers are responding to demand by creating more flexible, cost effective policies to meet the needs of small to medium sized enterprises (SMEs) as well as larger companiesmuch. The core benefit is accidental death and dismemberment so pricing varies greatly – for example, when offering [a benefit of] $50,000 versus $1 million. Companies may prefer to cover all employees under an annual policy for peace of mind – it is difficult to predict who will travel and when, so this approach ensures that all business trips are covered.” A common misconception is that BTA applies only to air travel, Cruz added: “In fact, BTA is travel by any means (plane, train, bus, personal vehicle or on foot) as long as there is a business purpose.”