Navigating a new travel landscape
How is travel in the US likely to emerge from the pandemic? Jeremy Murchland, President of Seven Corners, in the US, discusses how consumer perceptions of travel insurance have changed over the last year and what travel insurers need to do to prepare for travel beyond Covid
The US is beginning a gradual shift towards a post-pandemic world that will look different than before in many ways. As vaccines are distributed more widely and people begin to feel safer with their surroundings, businesses are continuing to adapt to the new environment, and travel is no exception. To ensure travellers have the necessary resources to navigate the new travel landscape, travel insurers must be keenly aware of changing conditions and respond to them quickly and appropriately. Covid-19 will likely have long-term impacts on the way people travel, where they go, and how often they are willing to leave home.
Business travel to remain limited
As a result of the pandemic, both business and leisure travel segments have been uniquely affected. Each face new realities where strict safety precautions and restrictions prevail. Business travel in particular may never return to pre-Covid levels, even with people feeling more comfortable leaving home. As remote work has gained traction due to the virus, the need for business travel has decreased. We have learned people can be productive and collaborate successfully via virtual platforms even when they are thousands of miles apart. The need to be physically present together has been proven unnecessary in most business environments. As a result, companies will be less likely to incur the risk and expense of business travel if it is truly not mandatory.
Leisure travel, especially international trips, will also be slow to return to prior levels until vacationers feel safe and capable of following Covid-19 travel requirements. People want to feel relaxed when they go on vacation; they do not want to be stressed about entry/exit testing requirements. With the variety of regulations and the frequency with which they have changed, travellers are confused and often discouraged about planning vacations. In the last several weeks alone, several countries have moved to require a negative Covid-19 test upon entry. The ease of getting tested and the timeliness of results will impact travellers’ willingness to venture abroad in lieu of domestic travel, which is simpler to manage. For insurers, the challenge is helping people overcome the difficulties of meeting these requirements. Once customers understand that travel can be relatively hassle-free with help, leisure travel will begin to increase, starting with domestic travel.
An increased awareness of travel insurance
Beyond the impact on travel itself, the pandemic has also affected the travel insurance industry. For one, it has increased the public’s general knowledge of travel insurance and its benefits. Many people who may not have previously purchased travel insurance now have a better understanding of why they need it and how it can help them address travel difficulties. In the last several months, for example, Seven Corners has noticed an increase in the number of calls where customers ask educated questions about benefits and services.
After developing a better awareness of travel insurance, travellers now want reassurance that their coverage addresses each Covid-related concern they have. Therefore, it is important that international travel insurers focus on continually re-evaluating our benefits and services so we can accommodate new requirements in the international marketplace. Some companies that previously had existing policies to address pandemics have expanded their offerings to include Covid benefits, while others have created brand new policies.
Insurers must always be ready to react
Another major impact on the travel insurance industry has been the heightened need for quick updates to policies in response to changing consumer needs. It has become even more essential for travel insurance providers to adapt to new developments at any time. US Centers for Disease Control and Prevention guidelines, domestic testing requirements and international market conditions are constantly evolving, meaning insurers must always be ready to react. Gone are the days of annual benefit and rate adjustments. Now, policies may need revision within weeks to meet the developing demands of the marketplace!
The future of travel is ahead of us. While it may look very different from the past, it can be safe and relaxing. Travel insurance providers, can provide the assistance that travellers need to return to travel when they feel comfortable. Consumers can work with us to better understand how changing travel conditions will affect them, and we can help them choose coverage that meets their needs in a post-pandemic world.