COVID-19 travel insurance becomes a holiday business

COVID-19 insurance policies are increasingly including passports and sunscreen as holidays, creating opportunities for insurers as more countries require mandatory coverage if visitors fall ill with the coronavirus.

In some regions, airline bookings are on the rise, raising hopes of a resurgence in summer traffic, but also raising fears among tourists about getting bills if holidaymakers are caught by the virus.

More than a dozen countries from Aruba to Thailand need COVID-19 coverage for visitors, with Jordan being the latest to consider such protection, organizers of an emergency services plan told Reuters.

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According to travel insurance consultant Robyn Ingle, the market for all types of COVID-19 travel coverage is estimated at between $ 30 billion and $ 40 billion a year, with companies such as AXA and AIG underwriting protection.

But an increase in demand for COVID-19 coverage also means insurers can make the big hook if a new wave of infections to large numbers of cancellations or tourists becomes ill.

“Travel insurance and protection services are keeping pace with the journey as it resumes,” said Dan Richards, CEO of Global Rescue.

COVID-19 insurance benefits typically cover treatment up to $ 100,000, and may include coronavirus testing costs and services such as evacuation or local burial or cremation. These benefits, introduced by insurers by mid-2020, are sold either as supplements or as separate policies with sickness or quarantine coverage.

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Jeremy Murchland, president of travel insurance company Seven Corners in Indiana, said travelers are now more likely to insure their travels because more countries need COVID-19 coverage.

A travel insurance plan that includes travel protection, medical expense coverage for COVID-19, and luggage and personal belongings protection typically costs 4 to 8% of the dollar value of the trip, Murchland said.

Although the pandemic plagued the trip, the demand for coverage created opportunity for the hard-hit insurance industry and a niche to develop new products, companies said.

In June, for example, Seven Corners introduced an optional medical itinerary to cover expenses for the coronavirus, Murchland said. By the end of the year, the product with coronavirus coverage accounted for about 80% of total medical itinerary sales.

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Seven Corners also bought a 20% increase in travelers who bought a high price “cancel for whatever reason” in 2020. The policies cover cancellation costs associated with the virus.

Some countries have offered travel insurance for incoming visitors – by including it in their entry or visa fees, or by requiring proof of coverage, insurer World Nomads said.

Jordan is evaluating whether a mandatory fixed fee for visitors will be needed as part of a program of Global Rescue and the Global Travel and Tourism Resilience Council, said Taleb Rifai, co-chair of the council. The program, which costs up to $ 100 per person, covers certain disasters and diseases such as COVID-19.

Jordan’s Tourism Bureau was not available for comment.

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It is not clear how the coverage demand will develop as many more people are vaccinated against the coronavirus with vaccines.

Frank Comito, a special adviser to the Caribbean Hotel and Tourism Association, said some budget travelers had complained about mandatory coverage. And some countries may halt or relax the requirement because ‘we are moving away from the pandemic’.

Rifai, former secretary general of the United Nations World Tourism Organization, said he expected countries would need coverage as the vaccines would take years to take effect worldwide.