Over the past year, insurance providers have developed travel insurance policies that include coverage for travellers who contract Covid-19 whilst abroad. Expenses covered include medical, pharmaceutical and hospitalisation fees, reimbursement for flights missed due to testing positive for Covid-19 whilst at the destination and repatriation. Many policies now also cover the costs of accommodation in circumstances where the individual is required to stay in a quarantine hotel until they complete the isolation period or test negative. In the unfortunate event of fatality, repatriation of the deceased is also included. To give travellers even more reassurance, many policies now include cancellation costs when a person tests positive or must isolate just before their trip and consequently cannot go.
Insurers are continuing to innovate and provide the cover that people need, although these comprehensive policies often come at a price.
The purpose of such policies is not only to provide travellers with reassurance that they will receive adequate care and reimbursements if they contract Covid-19 before they go away or whilst abroad, but also to provide financial support to the hosting country. It is very important for countries that are welcoming tourists to protect their health systems and ensure they do not incur massive financial bills caused by visitors requiring medical care for Covid-19. Costs can escalate quickly once a patient is admitted to hospital, especially if they are in a critical condition and require a ventilator.
According to data collected by Premier, patient bills can be up to five-times higher when ventilation is necessary. They found the average cost per patient with a ventilator to be US$65,504 compared to $12,747 without. Expenses quickly mount when using ventilators due to the amount of medication required to keep the patient sedated and stable, the large number of staff needed to monitor them, and the long period of time they are used for. Premier found between April and September 2020, the average stay for patients dependent on ventilators was 16.8 days compared to 6.8 days for those without. After being taken off ventilation, many patients still require hospital care and therefore spend even longer admitted while they recover.
Making insurance mandatory
To protect both health systems and travellers, many countries have now made it mandatory to purchase travel insurance that includes cover for Covid-19 medical treatment before arrival. These countries include Anguilla, Aruba, Bermuda, Cayman Islands, Chile, Costa Rica (for unvaccinated tourists), French Polynesia, Israel, Jordon, Lebanon, Nepal, St. Maarten, Thailand, Singapore, Turks and Caicos and Ukraine.
Travellers entering Aruba, St. Maarten, the Bahamas and Jamaica must purchase insurance directly from the respective government either in the form of an insurance policy, or a visa that includes coverage for incidents related to Covid-19.
Individuals can enter Bermuda and French Polynesia without travel insurance on the condition they officially declare they will assume all financial expenses if they contract Covid-19 whilst in the country.
Countries seeking to boost their tourism revenues are trying to adapt to the current situation and come up with initiatives to help facilitate and encourage travel during the pandemic. Turkish authorities, for instance, have formed a partnership with providers Türkiye Sigorta to offer visitors an optional Covid-19 insurance package that can be purchased as part of the Safe Tourism Certificate programme. Some authorities are encouraging airlines to offer Covid-19 cover to their customers. Prompted by the government, Icelandair are now offering ‘Covid Plus’ medical cover to all passengers through their partnership with Cover genius, a global insurance distribution platform.
Peter Smith, VP Strategic Partnerships - Travel at Cover Genius, told ITIJ that establishing a brand new, unique product set and delivering it to the market in record time (weeks!) requires innovation, agility, and a nimble approach to product development – all things that traditional insurers aren’t great at. As an insurtech, Cover Genius has an end-to-end capability to co-create products with partners offering policy development, claims handling, and instant claim payments. “We are assisted by a panel of agile underwriters willing to service the needs of global customers, and we were able to introduce this first-of-its-kind protection for Skyscanner customers around the world,” he added. It wasn’t an easy fit and the biggest challenge was from the supply side - launching an insurance product that covers a global pandemic that we are in is extremely challenging.
Numerous destinations are also offering free Covid-19 travel insurance to all visitors. In the Dominican Republic, such insurance is available directly through the government. In other countries, governing bodies have formed partnerships with insurance providers to create policies specific to Covid-19 cover. Portugal’s tourist board has teamed up with RNA Assistance to provide free coverage through the ‘Portugal Travel Insurance Program’, Andalusian authorities have partnered up with Europe Assistance Spain and the Canary Islands with Axa.
Gema Rabaneda, Media Relations and Reputation Manager from Axa Spain, said that the process of getting the insurance underwritten and onto the market was ‘quite quick considering the complexity of the business and the fact that we were creating a policy that had never been done before’. When discussing working with public entities she added: “As an insurer, we work a lot with public entities that insure their vehicle fleets, buildings or public employee benefits. In that sense, we are used to working together and it has not been very different.” She highlighted that the most important thing was professionalism in the hour of underwriting the policies and ‘the common goal of protecting tourists as best possible’.
“It is certainly a product that is required currently and will evolve according to the pandemic situation itself,” Rabaneda told ITIJ. “In terms of lessons learned, I think we know more than ever that the need for protection and flexibility depending on the needs of each client and each situation is very important. Insurance is a sector with a firm vocation for customer centricity and innovation. Risk is our raw material which, like energy, evolves and transforms, forcing us to always be attentive to new demands and needs.”
Flexibility and adaptability of insurance
One of the biggest challenges for providers and governments has been the novelty of the situation and constructing policies whilst the state of the global pandemic continues to change. This has called for flexibility and willingness to adapt accordingly. The focus has been on creating policies that support the safety and wellbeing of clients whilst also considering the needs of the host country. The Balearic Islands have recently extended their partnership with RACE Insurance to offer free Covid-19 cover for tourists until the 31 of December 2021. This shows the authorities consider it to be a beneficial scheme and over time more information regarding the uptake and success of such policies can be used to make any necessary adjustments and improvements. In the coming months, we could see more of these partnerships emerging and Covid-19 policies from countries keen to reenter the tourism game could become commonplace in the industry.