GlobalData Plc

Could travel insurance become mandatory?

Thailand is considering making travel insurance compulsory for visitors entering the country. The concept could be adopted by other nations, prompting an increased need for cover.

Thailand may be about to make travel insurance compulsory for tourists. At present, visitors without cover are costing the country at least THB3bn (£69.5m) a year for medical treatment at state hospitals. The idea is being considered by officials at the Ministry of Tourism and Sports. Government officials will discuss the issue of tourism before submitting the proposal for approval. If implemented, the legislation would see visitors having to show proof of travel insurance to immigration officials before they are allowed to enter the country.

There were 467,000 trips made to Thailand by UK residents in 2016 according to ONS figures. If the legislation is approved this means a substantial number of individuals may require travel insurance in the future, including many who previously would have neglected to purchase a policy.

The concept may also travel further than Thailand, which could have a major impact on the travel insurance market. Other countries suffering from similar tourist-related medical costs could look to implement similar policies. This would again increase the need for UK residents to purchase travel insurance.

The UK travel insurance market has been in decline in recent years. A heightened need for cover would increase uptake and may cause the market to grow. However, it could also mean that travel insurers have more rules to comply with; for example, documents need to meet a certain regulatory standard for tourists to be able enter a country. Claims costs would also be expected to rise if medical costs are no longer covered by a foreign state.

It is additionally worth discussing the concept in relation to Brexit, which could potentially result in the UK no longer being able to benefit from European Health Insurance Cards. If the UK leaves the European Economic Area it may consider making cover compulsory for visitors, especially considering the current pressure on the NHS and the fact that health tourism costs the service millions each year. The change could make it easier for the NHS to recover money from insurance companies as opposed to individuals.

By Danielle Cripps, General Insurance Analyst

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