Travel Agent NewsRead the fine print: Insurance companies are honing their products to meet changing demand, but not all Covid-related claims are covered.

How Covid-19 has changed the world of travel insurance

More countries including Thailand and the Bahamas now require foreign visitors to have Covid-19 coverage prior to entry.
More countries including Thailand and the Bahamas now require foreign visitors to have Covid-19 coverage prior to entry. Photo Credit: Getty Images/Viktor_Gladkov

Travel during Covid-19 is fraught with greater risks and uncertainty, as snap border closures, cancelled flights and emergence of hotspots have a greater chance of causing disruptions to travel plans than before.

The unpredictable nature of travel in the wake of the pandemic has clearly elevated the need for travel insurance for any potential traveller or holidaymaker, said travel agents in Asia.

“We have seen an increase in our clients' need to use our bespoke services as travel advisors for postponing their trips and also planning for their bucket list vacations for later in the year and in 2022/2023”, said Monica Alsagoff, the Singapore head of A2A Safaris and head of marketing Asia at A2A Journeys.

“Our clients and travellers would now seek Covid-19 related travel insurance coverage that includes trip cancellation costs and other essential coverage if diagnosed with Covid-19: medical expenses overseas, hospitalisation, emergency medical evacuation, repatriation and quarantine allowance due to Covid-19”, she noted.

Carmen Chan, COO at Goldjoy Travel, has also observed an uptick in requests for insurance covering events relating to Covid-19, while airlines like Cathay Pacific, Emirates Airlines and Virgin Atlantic are offering Covid flexibility policies and inflight travel insurance.

Having medical and cancellation coverage has become the most important consideration for travellers but premiums "will become more costly because of higher risks after Covid-19”, Chan said.

While travel insurance would usually cover medical expenses incurred overseas, a follow-up medical expense three months after return, and insurance extension of up to 10 days if you need to stay overseas, there are irrecoverable costs that are not covered due to trip curtailment, remarked Lim Kok Yong, founder of Intriq Journey.

The luxury travel agency has worked with insurance companies including AXA to offer clients coverage against Covid-19 as well as protection against flight delays, loss of baggage and personal money.

Insurance companies rise up

Insurance companies have jumped into the Covid-19 fray, introducing products that would appeal to current needs in the travel landscape.

In Singapore, Sompo Insurance Singapore was among the first insurers to launch Covid-19 insurance in 2020 in anticipation of the demand for such services in the wake of the pandemic.

“Sompo’s Travel (Covid-19) protects travellers against hefty overseas medical expenses or the inconvenience of a trip cancellation should they be tested positive for Covid-19 prior or during the trip”, said Jolene Chua, senior manager, retail business division.

The policy, however, does not cover compulsory quarantines imposed by a foreign government and the cost of compulsory Polymerase Chain Reaction (PCR) test and swab test regardless of the test results.

The company as seen positive growth in demand with the rollout of new policies after December 2020, although ongoing quarantine restrictions in many destinations continue to put a dampener on cross-border travel. “With vaccination stepping up in many countries, we do foresee a slow but steady growth in travel take-ups”.

As inoculation gathers pace in many countries, QBE Hong Kong is now offering medical expenses and trip cancellation insurance coverage to insured persons who contract Covid-19 after being vaccinated.

“For the medical component of our travel insurance policy, it covers the continuation of treatment which started overseas, and covers someone who is diagnosed within 14 days of their return, subject to terms and conditions”, noted Lei Yu, CEO North Asia and regional head of distribution at QBE.

New cancellation policies

New entrants such as Koala want to reinvent travel insurance amid changing needs.

The Paris-based insurtech tracks journeys in real-time to instantly inform passengers and airlines if there is any trip disruption, and the consumer is automatically compensated – a crucial factor especially during Covid times when trips are postponed and cancelled at the last minute.

With the pandemic has led to a significant reduction in overall travel volumes, shorter average distance travelled and shorter time between booking and travel, Koala's CEO Ugo Weyl described the urge for transparent travel insurance which addresses travellers’ needs.

“We have seen more active involvement from customers in understanding their cover and the terms of their insurance policy and therefore, the need of the hour is to make insurance as simple as possible so that the customer understands what he/she is covered for and what is not”.

An ideal package, said Weyl, would include Covid medical and repatriation coverage, Covid cancellation coverage, cancellation for any reason coverage, plus higher coverage limits on each of the above categories.

Koala hence introduced the “Koala Flex” product which offers a no-questions-asked refund policy if a traveller decides to cancel their trip – for whatever reason. “We want to restore customers’ confidence to book travel and to book for their holidays in advance”.

Moreover, the greater flexibility offered by both insurers and airlines has led to an increase in advance bookings for summer 2021, he noted. Passengers are more aware of the need to protect themselves from unforeseen situations.

Using a B2B2C model to partner with airlines, travel agents, transport providers and travel players, the Paris-based startup is currently in discussions with potential partners in Asia Pacific to expand the travel insurance platform in the region.

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