UK travel insurance market - post-Brexit and Covid
Greg Lawson, Head of Travel Insurance, Collinson, spoke to ITIJ about fluctuations in the UK’s travel insurance marketplace, and how companies are responding
Are premiums matching claims rates?
Generally, there has been upward pressure on rates and premiums following the challenges of the last two years, further exacerbated by this summer’s travel chaos and recruitment challenges in the travel sector. For many insurers, this summer has been challenging due to the early post-Covid spike in demand creating unexpected claims volume, a higher volume of large losses fuelled by medical inflation in a number of regions, and then the late summer starting to slow as the cost of living media impact plays through to customer confidence. Given this, I would expect premiums to remain relatively higher than pre-Covid given the expected global inflation pressures and well-publicised holiday cost increases of more than 20 per cent.
Are you seeing an increased level of interest from customers seeking comprehensive insurance?
Customers certainly seem more focused on understanding what cancellation and trip disruption coverage exists. In fact, Collinson’s recent research found that 61 per cent of travellers said they are now more likely to buy travel insurance today than they were before the pandemic, demonstrating increased demand for cover. However, what’s particularly interesting is that the research also found that nearly three quarters of travellers (74 per cent) are more likely to read the terms and conditions of any potential cover than they would have been before the pandemic. It’s clear, therefore, that brands or companies who can demonstrate expertise, clarity, trust and stability – regardless of the extent of the cover – will likely see increased demand.
Are you seeing significant increases in the cost of medical treatment in Europe? If so, how are you managing cost containment?
Medical inflation has varied significantly across Europe, even with emergent treatments, but the general pressure is upwards. There are some Southern European countries where we have seen up to 30-per-cent increases in medical costs, and some countries where there were still Covid restrictions in place, adding to any repatriation costs. We adopt a mix of case management and cost containment with our technical claims experts working with our own assistance teams but also several network partners across Europe and North America, managing costs so we’re well placed to continue to support our clients and partners.