07 Sep 2020
Posted in Coronavirus
Travel insurance policy changes promising COVID-19 cover will help the sector to recover, says GlobalData
The spread of COVID-19 forced many providers in the travel insurance market to pause the sale of new policies and adapt their wording in order to minimize losses. This is a significant move that will give consumers more confidence in traveling and allow the travel insurance market to recover from the effects of the pandemic, according to GlobalData, a leading data and analytics company.
Saga is now the latest provider to include some COVID-19 cover. Saga was the 16th most popular travel insurance provider in 2019, according to GlobalData’s UK Insurance Consumer Survey, which is a strong position given that the company’s policyholders are exclusively over 50s. The announcement that Saga will now protect policyholders against trip cancelation claims, should they have a positive COVID-19 test result within 14 days of travel or whilst abroad, will help set the bar for the rest of the market.
Daniel Pearce, Senior Insurance Analyst at GlobalData, comments: “Prospective travelers will welcome the change to policies as the fear of being unable to go on a trip due to quarantine rules will have been limiting the number of trips booked and stifling growth in the travel insurance market. The change to the policy wording is of particular significance given the greater impacts COVID-19 has on the older population.
“However, despite the policy going further than others currently available, it will still not be enough to spur growth in the travel insurance market. Globally, the spread of COVID-19 appears to be on the resurgence, with local lockdown measures being implemented and changing quarantine rules becoming increasingly common. Despite this, policy wording must continue to be adapted to provide some element of cover against COVID-19 in order to allow the travel insurance market to recover from its greatest ever shock.
“If interest in international travel remains well below pre-COVID-19 levels for some years then the travel insurance market may have to look towards marketing policies for staycations. The popularity of staycations has increased drastically this year and although such policies need not cover the same perils as they do for international travel, this segment could be a hotbed for future growth.”