Young, carefree and uncovered

Research by UK travel association ABTA has found that the number of people leaving the UK for a holiday and not taking out travel insurance is continuing to rise, despite every effort made by insurers and the Foreign and Commonwealth Offi ce to encourage the purchase of holiday protection. Mandy Aitchison has the details

Research by UK travel association ABTA has found that the number of people leaving the UK for a holiday and not taking out travel insurance is continuing to rise, despite every effort made by insurers and the Foreign and Commonwealth Offi ce to encourage the purchase of holiday protection. Mandy Aitchison has the details

ABTA’s research found, specifi cally, that the proportion of people failing to take out any sort of travel insurance for their holiday increased to 24 per cent in 2012 – from 20 per cent in 2011. The number of people taking out annual cover also fell in 2012 compared to 2011, with just 23 per cent of people buying such insurance for their holidays – in 2011, this fi gure stood at 30 per cent. The research further revealed the group most likely to travel uninsured, showing no great surprise or change in trend – younger male travellers remain the travelling sector least likely to purchase holiday cover. In fact, men are eight per cent less likely than women to take out insurance; and, overall, 48 per cent of those aged between 15 and 24 years old travel without cover on a regular basis. When it comes to the impetus (or lack of it!) behind purchasing habits, it seems that the number of travellers who think insurance is too expensive has increased sharply over the past 12 months, with 31 per cent of consumers citing this as a reason for not buying cover – in 2011, this figure stood at just 20 per cent.

Much has been made in the pages of ITIJ over the years of the lack of consumer understanding of travel insurance as a product, and it seems that this continues to be an issue that plagues insurers. According to ABTA’s report, 16 per cent of consumers regarded travel insurance as unnecessary, as they wrongly believe the government will pay for treatment abroad, while 17 per cent of travellers wrongly assume that the European Health Insurance Card will pay for everything they need – including an air ambulance home (in fact, one third of 15 to 24-year-old travellers think this is the case). Since 2007, the sale of travel insurance in the UK has been regulated by the Financial Services Authority (FSA), and as a consequence, some travel agents simply stopped selling policies in order to avoid the increased costs and bureaucracy. ABTA warned at the time the regulation was introduced that such red tape would result in fewer travellers buying policies – a warning that seems to be true, given that travel agents now account for just 17 per cent of travel insurance sales in the UK. ABTA has since called on the government to reverse the FSA regulation. Sadly, it seems that ABTA has confi rmed what many insurers thought to be true anyway – that even the holidaymakers who do buy insurance are not fully aware of what they are purchasing, with thirty per cent of skiers and snowboarders surveyed not taking out specific winter sports coverage as part of their travel insurance.

John de Vial, head of fi nancial protection for ABTA, commented on the survey results: “The increase in the number of people travelling uninsured is alarming. In these tough economic times, holidaymakers may feel pressure to cut costs but travel insurance is essential. We hear too many horror stories of people who have forked out huge sums of money or not got the right treatment because they’ve had an accident abroad and been uninsured.” Lynda St Cooke of the Foreign and Commonwealth Office (FCO) added: “It’s important that people understand what the FCO can and cannot do to help British nationals who get into trouble abroad. We also advise reading the small print [of your travel policy] to check that [it] covers you for everything you want to do on holiday.”

Meanwhile, research carried out by the FCO has supported ABTA’s findings – but for the over-55 age group. According to the FCO survey, one in 10 over-55s admit that they do not always take out travel insurance before going on holiday, despite the fact that over half of those surveyed said they had a medical condition of some kind. One third of those who don’t always take out travel insurance choose not to because they are ‘only going on a short break’, while 27 per cent say it’s ‘too expensive’, and 18 per cent think they don’t need it as they are ‘visiting family or friends’. Some also say they are covered by a travel insurance policy they have as part of a bank account, but with the value of such accounts now being called into question, it might make some consumers consider the benefits of such policies before relying wholly on them for comprehensive cover.

Perhaps more concerning for the insurance industry, the FCO survey showed that one in five respondents with a travel insurance policy in place are willing to risk the validity of that cover by not declaring a pre-existing medical condition because they are taking medication to manage it. Fifteen per cent of respondents said they wouldn’t update their policy at all if their medical status changed, or if they were prescribed new drugs for an existing condition they had declared.

Similar news relating to older travellers came in this month from Saga, the UK over-50s insurance specialist, whose own research found that one in 10 travellers over the age of 50 have travelled without insurance at some point in the last five years, and 30 per cent of travellers under 50 years old chose to travel without cover during the same period. Saga’s research supported that of ABTA, finding that younger travellers are more likely to take such risks, with 27 per cent of those aged between 25 and 34 not taking out travel cover for their holiday.