It’s now five years since Covid-19 was officially declared a pandemic, and the world was changed utterly.

By now, enough data is available to see how the shock hit the world and how it has recovered since, so we at Finaccord thought this was a good opportunity to take stock and review how an unprecedented, global-level disaster affected travel and the insurance and assistance industry that has developed to protect it.

To understand this impact, Finaccord reviewed 14 key markets: 10 in Europe plus Australia, Brazil, Canada and the US.

An earlier ITIJ article in November 2024 introduced Finaccord’s findings on the European impact: we saw how an overall pattern of decline and recovery played out differently across 10 diverse markets, with both trips and premiums for associated travel insurance policies falling and recovering at different rates.

Looking at the wider world, still more diversity can be expected. Covid-19 was a global event, but responses were inevitably made country by country more than at an international level: ultimately national governments made their own decisions about locking down borders, controlling movement and allocating medical resources. The timelines for each country, in terms of when the pandemic first hit, when governments adopted policies to control it, and when those policies were lifted, were very different.

Australia historically sees a high rate of outbound travel, and its residents were clearly keen to get back out across the world

Decline and recovery

When it comes to the impact on outbound travel, Australia is the most extreme example Finaccord has studied. With its own strict border controls, plus those of key destination countries (New Zealand and several Asian countries), the travel collapse was even starker than that seen in other countries, from 11.3 million outbound trips in 2019 to only 300,000 in 2021.

But the recovery was correspondingly quick, with trips back to 2019 levels by 2023. Australia historically sees a high rate of outbound travel, and its residents were clearly keen to get back out across the world.

The result when charting gross written premiums for associated travel insurance is a perfect V-shape. The travel insurance market fell precipitously by over 80% between 2019 and 2021, but then saw an equally rapid recovery. Between 2019 and 2023, the overall result is growth, even allowing for the jump in inflation that followed the pandemic.

In Canada the picture is less dramatic, though of course the pandemic years could never be ordinary. Outbound trips saw a less extreme collapse, falling from 33 million in 2019 to five million in 2021. But their recovery also proved to be slower, with trips still 15% below their 2019 level as of 2023. Associated insurance premiums show a similar pattern: they are on a trajectory towards recovery, but as of 2023 they had not yet recovered.

Considering only trips, Brazil’s story looks a little like Canada’s, with a dramatic collapse from 11 million in 2019 to 1.7 million in 2021, before a near recovery by 2023.

In Australia and Canada, trips and premiums correlated closely, but in Brazil the travel insurance market moved less predictably. Premiums spiked in 2022 to a level notably higher than the 2019 figure, despite the trip count remaining significantly lower. This points to substantial rises in both premiums per policy and insurance uptake, as the pandemic sparked awareness of travel risks and caused insurers to re-evaluate their offerings and pricing.

The US maintained more international travel than the other countries studied. Its nadir was in 2020 rather than 2021, with trips falling by two-thirds, meaning that recovery had already begun in 2021, and thanks to rapid growth the 2023 trip count exceeded that for 2019.

The US travel insurance market has always looked a lot smaller than it should be, considering the country’s size and wealth, due to historically lower levels of international travel. This had been changing before Covid-19 hit, with substantial growth in premiums of 11% per year. Much like trips, gross written premiums fell substantially in 2020, but had recovered to their 2019 level by 2022, and showed strong growth by 2023; the result is real growth between 2019 and 2023, even after accounting for high levels of inflation.

Brazil’s story looks a little like Canada’s, with a dramatic collapse from 11 million trips in 2019 to 1.7 million in 2021, before a near recovery by 2023

As with Europe, business travel in these four markets tended to show less recovery: though in Australia and the US overall trips had recovered by 2023, this was not true of trips for business purposes. Companies were already cutting back on business travel before 2020, facing cost pressures and the growth of teleconferencing as an alternative, and naturally Covid-19 heightened this trend. There has clearly been a knock-on impact on business travel insurance, which has not seen as strong a recovery as cover for leisure travel.

Back to normal?

If the overall story, in Europe and outside, is one of decline and recovery, does this mean that the travel insurance market is ‘back to normal’?

The answer depends on what country we’re looking at. In Australia and Canada, both travel and insurance uptake were high before the pandemic, so a post-pandemic recovery puts things back on track. For the US, which still has a lot of room for growth in its outbound travel market, strong growth was the pre-pandemic ‘normal’. As we’ve seen, for Brazil the story is different: travel insurance market growth after the pandemic far exceeded what might have been predicted given the much slower growth in trips, leaving the Brazilian market looking dramatically larger.

The future is unwritten, though: one finding from Finaccord’s 2022 Travel Metrics survey into travel insurance buying behaviour is that, on average, around 40% of respondents said that the pandemic had made them more likely to purchase travel insurance in future. Interestingly, this percentage was even higher in Australia and Canada. It will be interesting to see if this increased awareness of travel risks translates into a longer-term impact, particularly in the markets for domestic travel insurance, where trips are typically much less likely to be insured.

Competitors old and new in the post-pandemic market

Finaccord’s Travel Insurance and Assistance reports focus on distribution as well as market sizing, tracking partnerships with hundreds of travel companies, airlines, banks and other organisations. This is of course another area where the pandemic caused major shake-ups, as airlines and travel companies disappeared, banks withdrew travel insurance offerings, and new competitors and partnerships emerged.

The result, when looking at Finaccord’s estimates for insurer market shares, is a picture that can look very different from the landscape when Finaccord last researched these travel insurance markets in 2018 and 2019. One notable finding is increased concentration, particularly at the top of the market. In Australia, Finaccord found that Zurich appeared to have extended its leading position through its Cover-More brand, although other competitors saw shake-ups such as the arrival of Pacific International through its 2021 partnership with nib.

Meanwhile, in both Canada and the US, Allianz appeared to have expanded its activity, and consequently its prominence in the market, in the wake of the pandemic. Also notably active was Generali, gaining ground in the US through its acquisition of the Trip Mate brand in 2019 and key partnerships in the travel trade through its Generali Global Assistance brand.

Just as Brazil’s overall market size saw the most dramatic shifts among the countries studied, its competitive landscape has also been reshaped through changing partnerships with the assistance companies that dominate the market. In its 2019 report, Finaccord identified Sompo Seguros as the market leader, primarily due to its partnership with Travel Ace Assistance; at the time, however, the latter had already been acquired by Zurich, and as might be expected in the intervening years it rebranded as Universal Assistance and switched to Zurich as underwriter. In Brazil’s fast-changing market, upheavals like this have caused the concentration among leading insurers to fall over time.

Although people around the world have enthusiastically resumed their travels, Finaccord’s surveys suggest that the pandemic has also left them increasingly aware of risks and looking for a sense of security. As insurers react, there is plenty of scope for further transformations in the years to come.