That cancellation insurance now makes up the majority of all travel insurance purchases for US customers shouldn’t be a massive surprise to any of our readers. As Squaremouth notes: “US residents are growing more antsy at home, but still show a great deal of apprehension in both the safety and likelihood of travel.”
Travellers willing to pay more for peace of mind
Squaremouth CMO Megan Moncrief notes that trip cancellation has actually always been the primary driver of travel insurance purchases, accounting for around 80 to 90 per cent of its sales, but now it has peaked at 95 per cent. And the ‘most drastic increase’ is that purchases of Cancel For Any Reason cover have increased by a whopping 200 per cent for 2021.
It seems that you can’t put a price on peace of mind – despite raising the cost of a policy by 40 per cent, travellers are opting for this cover, as it provides up to 75 per cent reimbursement for any reason covered by the policy.
Younger demographics buying travel insurance
Elsewhere, Squaremouth also identifies that the age of the travel insurance consumer has dropped to their mid-20s. A new market is emerging for travel insurers (in the US at least) – as Squaremouth reasons, its usually mainly 50- to 60-year-olds purchasing travel insurance in normal years’.
It seems that the message is finally getting through and the perception of travel insurance is slowly but surely changing to be viewed as a necessity. Travel insurers should pay special attention to their distribution channels – how consumers engage with these will be key to overall product penetration.