Terrorism is top of the agenda
It is sad to note that the fear of terrorism has become, for many, a new normal, with the spectre of indiscriminate violence never far from people’s minds – or the headlines Those in the travel industry might be heartened, however, by the fact that this fear is not deterring people from taking trips to the extent that might have been expected, and travel insurers have noted that insurance coverage is gratifyingly high on travellers’ lists of priorities. The reasons may not be ideal, but the figures themselves are broadly positive – people still want to travel, but they’re mindful to stay as safe as possible.
It is sad to note that the fear of terrorism has become, for many, a new normal, with the spectre of indiscriminate violence never far from people’s minds – or the headlines
Those in the travel industry might be heartened, however, by the fact that this fear is not deterring people from taking trips to the extent that might have been expected, and travel insurers have noted that insurance coverage is gratifyingly high on travellers’ lists of priorities. The reasons may not be ideal, but the figures themselves are broadly positive – people still want to travel, but they’re mindful to stay as safe as possible.
Following the Paris terror attacks in November last year, US-based travel insurance comparison site Squaremouth said that visitor traffic to its site rose by 38 per cent, with policy purchases rising by 17 per cent compared with the same time one year previously. Additionally, searches for ‘terrorism coverage’ grew by 53 per cent, and while the recent attacks in Brussels and Lahore have not led to significant changes like those seen last November, the percentage of site visitors using the ‘terrorism’ search filter has more than doubled compared with the 2015 average.
“We have seen an increase in calls and questions from customers asking about terrorism,” said Rachael Taft, content manager for Squaremouth. “This includes customers who already have policies and want to make sure they understand their coverage, as well as travellers looking to buy a new policy with terrorism coverage.”
Allianz Global Assistance in the US, meanwhile, has noted an increase of almost 10 per cent in travel insurance sales to leisure travellers over the past year, according to spokesperson Daniel Durazo, and the insurer also received over 200 calls from concerned travellers following the Brussels attacks. One hundred of these callers suggested that they were planning to cancel trips and file travel insurance claims – but as Casey Carr, general manager of Dallas, US-based Sharon Carr Travel says, travellers still often don’t quite understand what they are and are not covered for. “Terrorism coverage exists,” he is always sure to tell his clients, “but read the covered situations and just be aware.”
Many US providers require the US State Department to have declared an act of terrorism in order for coverage to become valid, and the attack needs to have taken place either in or close to a location on the travellers’ itinerary, within a specific period of time. Thus, Cancel For Any Reason policies are growing in popularity, despite the accompanying increase in cost. However, Carr also says that it is incumbent upon travel agents to properly educate their customers, reassure them when possible, and not prey on their fears. “We try to educate our clients about statistics,” he said. “How likely are you to be involved in a terrorism event during your travels? Once people grasp the astronomical odds against it, that goes a long way to alleviating fears.”
A persistent trend?
A recent YouGov poll, meanwhile, which surveyed high-income travellers (defined as US adults earning $100,000 or more annually), found that the majority (62 per cent) have not opted to make changes to their international travel plans following the various attacks that have taken place in Paris, the Ivory Coast, Istanbul and Brussels over the past five months. Twelve per cent of respondents said that they had cancelled travel plans – YouGov estimates the economic impact of these cancellations at over $1 billion. However, a more substantial 69 per cent of respondents stated that cancelling their plans ‘is the equivalent of letting terrorists dictate how I live my life’. That being said, respondents’ willingness to purchase travel insurance coverage has also increased from two per cent last November to 15 per cent in April this year. Eighty-one per cent of respondents also said that what they see on the news affects their choice of destination.
“The desire to travel is strong,” said Cara David, a managing partner at YouGov, “particularly as the person’s level of affluence grows. The fact is, people are standing up for what they want, and that is reflective of their independent spirit.”
Dean Sivley, president of Berkshire Hathaway Travel Protection in the US, suggested that the spikes in insurance-related inquiries that follow atrocities such as the Brussels attacks – or any high-profile media event – don’t always last. “There always have been events that do remind people that it’s good to get travel insurance,” he said, “and you do see spikes. But interestingly enough, I don’t think that they’re necessarily lasting effects.” He added that, in general, Berkshire Hathaway will see ‘somewhere in the 15-per-cent to 20-per-cent range in terms of percentage of additional bookings that happen during those periods’, and that these spikes tend to last for a few months. Allianz’s Daniel Durazo concurred that ‘it’s the crisis of the moment that drives a lot of interest in travel insurance – and there will be a next crisis’, while Isaac Cymrot, vice-president of industry relations for US-based Travel Insured International, agreed that ‘anytime there’s something that’s perceived negatively in the world that could impact travel, it’s going to have a positive effect on our business’.
Happily, though, it is not just terror-related events that cause interest in travel cover to spike. Beth Godlin, president of Aon Affinity Travel Practice, based in New York, said that awareness and availability are also helping to boost take-up. “Travel insurance is available in many more places than it ever was before,” she said, “so there’s a much higher degree of awareness of the product and the value. Because of that – because of the sheer sort of exponential increase in distribution points for the product – more people are seeing it, more people are buying it.”