Teaching Brits the true value of insurance

Tolman thinks that many of those who are travelling without insurance are having their decision made for them by the increased costs of everyday living, rather than any complacency that they will never require the security and assurance a policy would provide.

“One in five uninsured travellers is not ideal but our view is that this is largely driven by cost-of-living pressures rather than complacency as the inclination to travel uninsured is more common among those facing financial difficulties,” said Tolman. “Mintel’s report found that 28% of those struggling and 24% of those with tight finances intend to travel without coverage, compared to 17% of those with healthy finances.”

However, there are some other reasons that lead to travellers failing to take out the appropriate insurance policies. For example, in a survey conducted for Go.Compare, 16% reported that they chose not to as they would not be covered for a pre-existing health condition. Others admitted that it was the fault of their errant memory – 16% forgot to purchase a policy.

And there are also some who simply do not think they need it, whether that is because of the short duration of a trip (17%) or because they think insurance is an unnecessary expense altogether (25%). It’s a lack of information that Tolman thinks needs to be addressed.

“Even if premiums are affordable, some holidaymakers will judge travel insurance as unnecessary, but this is probably due to a lack of knowledge and awareness about what is covered and the potential issues that can arise when travelling,” he said.

“It’s important that the industry continues to drive home the message about the importance of having appropriate cover for all travellers, regardless of destination or duration of travel. However, it’s not just a challenge for marketing as it requires the whole business to collaborate – product design, underwriting, pricing, compliance and marketing.”

Embracing social media

Some of the measures Allianz Partners is taking to increase awareness of the importance of travel insurance include embracing new communication channels – and that includes TikTok and social media influencers, all the better to target Generation Z. Just under a quarter (23%) of 18–24-year-olds buy annual travel insurance policies, with that dropping to 11% of those aged 25–34, who are likely to buy individual insurance policies for specific trips instead. Allianz Partners is also working with the UK Foreign, Commonwealth & Development Office to promote its Travel Aware campaign across social media, with messages to remind holidaymakers to stay safe abroad.

Content and clarity is key so that travellers understand why insurance is important, and what they actually get from buying it: although medical care can be a big part of it, it’s not the sole benefit a customer receives.

“Within the industry, it is vital that we not only offer robust insurance products but also effectively communicate the tangible benefits they provide,” says Chris Rolland, CEO of InsureandGo. “From flexible policy options to responsive 24-hour English-speaking emergency assistance services, we’re dedicated to meeting the evolving needs of our customers whilst fostering a culture of transparency and accountability.”

Worryingly, holidaymakers can engage in much more risky behaviour when they’re on vacation, meaning that it’s more important than ever to ensure that their travel insurance policy is in place, covering all the activities they want to try, and the possibility of medical care should they require it.

“In recent weeks we looked at the specific issue of holidaymakers hiring motorbikes and mopeds on holiday, which is becoming a desirable holiday activity for around 21% of Brits this year,” said Rolland. “Alarmingly, 30% of survey respondents said they thought it would be the norm to ride a hire bike or moped without wearing an approved helmet, compounding the significant safety risk of people doing things they are unfamiliar with on holiday. Not wearing an approved helmet on a moped or motorbike will usually invalidate a travel insurance policy, leaving holidaymakers exposed to personally covering the cost of huge medical bills in the event of an accident. This is another example of the need for people to take out quality cover and for consumers to do their research before going on holiday.”

Cut the jargon

Another way that insurance providers can get their messages about travel cover across to consumers is by cutting out the jargon. Too much complicated language just puts people off, and making it all more simple and straightforward ensures they know how their policy works and the benefits they get from it.

And those benefits, in addition to medical care, can also be something insurance companies look to improve even further, making travel cover more attractive for potential customers.

“More fundamentally, travel insurance needs to look beyond only protection and towards becoming a full travel companion,” suggested Tolman, adding that the Allianz Assistance Hub means that over 3.5 million customers have access to a range of complementary services for travel via banking partners. “This could mean helping to organise itineraries, provide inspiration for upcoming trips, offer medical support whilst away, supply lounge upgrades in the event of travel delays, and even automatically compensate for flight delays.

“These complementary services provide support at all stages of a journey and ensure that, even if the policyholder does not need to make a claim, they are still able to derive value from the product.”

Even if premiums are affordable, some holidaymakers will judge travel insurance as unnecessary

The true value of insurance

It’s important, though, that customers don’t lose sight of the bigger picture. As Rolland said, it’s important that customers understand that regardless of the financial outlay, there are bigger costs if they don’t have a policy adequate for their needs – or if they are not insured at all.

“From our own surveys we know that medical emergency expenses cover is the most important benefit for our customers,” he said. “None of us wish to be confronted with a daunting £100,000-plus bill resulting from illness or accidents while abroad. So, while we acknowledge the economic challenges many individuals face, our priority is to offer the best possible holiday cover, rather than cheap but limited cover.”

He said that policy cost can be larger or smaller depending on the number of trips made and the destinations covered, but added: “The true value of a travel insurance policy is only realised when you need to make a claim. It’s worth bearing in mind that medical treatment is more expensive in certain countries, and this impacts the cost of the premium. Countries like the US and Canada are known for being extremely expensive, but so too can destinations like Spain, which is a particular favourite among UK travellers. A claim for emergency medical care in some parts of Europe can easily be £20,000 to £40,000, and repatriation with an air ambulance from the USA could be £80,000 to £100,000. People often just do not realise the high cost of medical emergencies when on holiday. It’s natural that people think it won’t happen to them, but it’s vital to be covered in case the unexpected does happen.”

Rolland also wants to see the industry helping travellers to understand that having appropriate insurance in place is another essential part of holiday planning – just as important as having a valid passport and packing the right clothes to wear.

“By offering accessible, quality solutions, our industry can effectively address travellers’ very real concerns and ensure that they remain protected during their trips,” he said. “It’s about viewing travel insurance as an investment in a stress-free holiday. It’s about making it easy!”