Solid demand

According to Allianz Travel Insurance, the number of travellers aged 60 and over purchasing travel insurance policies directly from them has increased steadily since the Covid-19 pandemic, rising by around 30 per cent since 2020. “We believe this shows a greater comfort in older travellers purchasing travel insurance online and an increase in our brand awareness and consumer preferences,” affirmed Allianz Travel Insurance. “We have also seen a steady increase in travellers aged 60 and over purchasing annual travel insurance products and rental car damage protection products from our direct-to-consumer website.”

In Canada, those aged 60 to 74 make up approximately 18 per cent of the population, and this age group is on track to see the most growth by 2025, according to Statistics Canada, said Brad Dance, Chief Customer Officer at TuGo. “The silent generation, on the other hand (aged 75 to 94), represents approximately eight per cent of the Canadian population. These generations together make up approximately 10 million Canadians. According to the Conference Board of Canada, 97 per cent of Canadian travellers aged 55 and older intend to purchase travel insurance,” he said.

Post-Covid-19, those over 60 who have the necessary disposable income to afford to travel still have the desire to travel

Staysure has been providing travel insurance coverage for a wide variety of conditions. “The over-60s market is an important area and we have built our reputation on helping to provide peace of mind to older travellers with pre-existing medical conditions,” a spokesperson said.

According to Garry Nelson, Head of Corporate Affairs at AllClear, given a distribution of wealth that is skewed towards the older generation, who also have the time and resources to travel, the over-60 demographic in the UK is the fastest growing of all age groups. “Post-Covid-19, those over 60 who have the necessary disposable income to afford to travel still have the desire to travel. The product offering is indeed very broad but understanding how to offer fair prices for this specialised demographic is quite an art,” he said. “The destination is an important factor, particularly North America and some countries in Europe, which have much higher costs than we see for medical claims compared to other European countries. Obviously age is also a factor from which we cannot escape since with older age it can take much longer to recover.”

Travel insurance requirements

The over-60 demographic understands the need for comprehensive, quality coverage, according to Nelson. “Generally, people have more medical conditions as they get older – rising from 13 per cent of 25–34 years to 50 per cent among the over-55 age group. Their surveys show that covering emergency medical expenses is the main priority and this is why they seek specialist medical cover,” he said.

According to Staysure, cover for pre-existing conditions is an area that is most important for the over-60s traveller. “While most providers may offer travel cover, they may restrict pre-existing medical conditions (PEMC), but this is an important requirement for peace of mind as travellers want to ensure that both their holiday and medical conditions are fully protected. Our brand and experience in this market is also a factor to many over-60s travellers who also need PEMC cover,” the company said. “Understanding the wide range of medical conditions, their propensity for claims, and the severity of specific conditions are all factors that are taken into consideration when setting fair prices for customers.”

Mature travellers tend to view travel insurance as an investment in their retirement, giving them the peace of mind to travel with confidence

According to Dance, typically insurers offer various types of coverage for PEMCs and/or stability period changes, on account of the increased likelihood of age-related medical conditions. “Medical questionnaires are also a requirement for travel insurance claims. We have always been focused on a comprehensive and competitive offering for mature travellers, including pre-existing medical coverage, competitive stability periods, plus a simple and straightforward medical questionnaire,” he affirmed. “Mature travellers tend to view travel insurance as an investment in their retirement, giving them the peace of mind to travel with confidence, knowing they will be taken care of in the event of an emergency. They expect to receive excellent medical care and treatment and flexible coverage that meets their healthcare needs and travel preferences. Mature travellers also expect that, due to their age, coverage for medical conditions is available.”

A defining feature of how elderly people purchase travel insurance is what could be called an ‘escape’ from online mechanisms, pointed out Nelson. “Elderly people may feel unsecure in exchanging data and money online as many have the feeling that their identity may, along with their card details, be compromised. There is therefore a high propensity of elderly people desiring the comfort and reassurance of being able to talk with someone. And AllClear has actually invested in people again, particularly post-Covid-19, to make sure that if people are unsure that they go back and talk to staff so they can have that level of confidence,” he said.

Price policies for the senior market

When it comes to pricing policies for the senior market, the price of the policy depends primarily on age, duration and medical conditions, but also, significantly, where people want to travel to, said Nelson: “The US, Canada, Mexico and the Caribbean carry a heavier weighting due to the high cost of medical treatment. Also, there can be a great variation in pricing between residents and overseas tourists.”

While lower-price policies may seem attractive, they can also be a false economy

Prices are set according to the conditions and other details declared during the medical screening process, he explained. “The history of claims, i.e. frequency and level of costs relating to specific conditions, is also taken into consideration. We have been highly successful in growing our sales through the breadth of coverage we offer and the quality of our products,” he said. “Our underwriters are happy, too, that we are pricing correctly to cover the level of risks we cater for. Most importantly, we want prices to be fair so we can continue to offer cover in 99 per cent of all scenarios presented to us.”

While lower-price policies may seem attractive, they can also be a false economy, according to Nelson. “In fact, if a policy is extremely cheap, there is probably a reason for this. The true value of a travel insurance policy is only realised when one needs to make a claim,” he said. “Establishing the right price is the responsibility of the provider. In addition to offering the right price, it is necessary to take into consideration the level of risk to try your best to mitigate losses for the underwriter so as to maintain a loss ratio at a continuously acceptable level.

Our customers, primarily being older, understand there is a premium to pay for travel insurance coverage

“The most important thing is to be able to give access to excellent quality coverage to the people who specifically come to us for a quote. The very low price is sometimes not the biggest advantage of the cover. One of the things that older people come to understand over time is that they have different and more complicated medical conditions than younger people,” he said. “Our customers, primarily being older, understand there is a premium to pay for travel insurance coverage, and one can see in the surveys that people are definitely saying that quality comes before price.”

AllClear is part of a committee led by the British Insurance Brokers’ Association (BIBA) that meets to discuss how to secure insurance policies for vulnerable people. “Our mission is for people, in particular for the elderly, not to be held back from enjoying trips and beautiful holidays, as there should be a policy suitable for all people at a fair and affordable price,” concluded Nelson.