Southern Cross Travel Insurance (SCTI) has reported that since the start of the year, Covid-19 claims have made up a third (33 per cent) of total claims received across its Australian international and domestic travel insurance products.
Between 1 January and 31 May, SCTI says that it has paid out for 82 per cent of Covid-19 claims, totalling a combined sum of A$630,690. The remaining 18 per cent of claims are either still being reviewed (10 per cent); were declined (three-per-cent); or were either under the policy excess or could not be finalized as the customer was unable to provide sufficient documentation (five-per-cent).
Although the majority (82%) of COVID-19 claims have been covered by SCTI, 10% of claims are still being reviewed, 5% were under the policy excess or could not be finalised as the customer was unable to provide sufficient documents, and there was still a small portion of claims (3%) which were declined. The most common reasons for the declinature of claims included:
The majority of claims were for holidays, and were driven by Omicron
SCTI says that the majority of Covid-19 claims received were for medical care and travel disruptions that occurred when customers contracted Covid-19 while on holiday.
The company’s international travel insurance product, TravelCare Australia, saw 81 per cent of claims received to date being from people who were diagnosed with Covid while overseas, with the top international destination for generating traveller claims being the US, UK, Fiji, India and Thailand.
Likewise, over half (52 per cent) of claims for SCTI’s Domestic travel insurance product were from people who had been diagnosed with Covid during their journey.
SCTI says the high number of claims for Covid-19-related travel disruption was driven by the onset of the rapidly spreading Omicron variant, which caused substantial disruption over the festive and southern hemisphere’s summer period. The variant caused many Australian travellers to cancel trips or change their itineraries while already travelling overseas.
“It’s fair to say that the Omicron variant presented a substantial operational challenge to our business, especially at the start of the year, as our contact centre and claims teams received a significant volume of enquiries and claims from customers impacted by Omicron over the summer break,” said Jo McCauley, CEO of SCTI. “Unlike other travel insurers we didn’t pause the sale of policies in Australia. Our research shows that two thirds (60%) of Australian travellers now rank a level of COVID-19 cover in their top three most important features of travel insurance.”
Despite the turbulence of recent years, McCauley noted that travellers are demonstrating a higher level of engagement with their travel insurance policy than was expected pre-pandemic.
“We’re experiencing customers contacting us a lot more than they used to, asking us a lot more detailed and hypothetical questions about what would occur in a certain situation,” she said. “It’s fantastic to see that customers are really engaging with the policy they’re buying, because it shows us that they value travel insurance and they’re really taking the time to understand how their travel insurance will cover them. I’m really hoping that this is a trend that we’ll see continue.