With the growing importance of opting for an insurance while travelling abroad, the travel insurance market is showing positive growth, riding on the upward swing within the global tourism industry.
Industry experts forecast a strong growth for the travel insurance industry. According to a report published by Allied Market Research, titled, ‘Travel Insurance Market by Insurance Cover, Distribution Channel, Users, Geography – Global Opportunity Analysis and Industry Forecast, 2014-2022,’ the travel insurance sector is expected to generate $28,264 million by 2022, growing at a CAGR of 8.5 per cent during 2016-2022. European nations and countries in the Asia Pacific region have shown most growth for this sector due to factors such as rise in the number of senior citizen travellers, and an increase in business travel expenditure.
However, the prime factor driving this growth is an increase in tourism. According to the latest UNWTO World Tourism Barometer, demand for international tourism remained robust in 2016 despite challenges. International tourist arrivals grew by 3.9 per cent to reach a total of 1,235 million. Some 46 million more tourists (overnight visitors) travelled internationally last year compared to 2015, and this was despite issues linked to safety and security. UNWTO also projects international tourist arrivals worldwide to grow at a rate of 3 to 4 per cent in 2017. These numbers bode well for the travel insurance sector.
Demand on the rise
As people travel more, the relevance of travel protection is steadily gaining ground, with more travel management companies, online platforms as well as airlines are catering to the needs of their clients. Arijit Munshi, General Manager, Tune Protect, EMEIA, online facilitator of travel insurance in collaboration with various local insurance companies in the region, says, “Travel management companies and airlines including cruise liners and destination management companies want to ensure that their clients travel with peace of mind and are covered for any unforeseen situation, particularly when it comes to health, and want to offer additional benefits through the travel insurance program such as flight delays, flight cancellation, baggage delays, etc.
“Expat hubs around the world are beginning to require mandatory health insurance before issuing a visa, and more and more countries are deciding to refuse entry without it. Many travellers don’t realize that without the correct insurance, they could be turned away from the destination they are visiting before they make it past airport arrivals. Apart from the EU countries which are mandating for all visitors to have a valid travel medical insurance, other countries which require a valid travel medical cover are Cuba, Turkey, Georgia and even Antarctica. And now more countries are evaluating the need for a medical travel cover.”
Munshi adds that travel insurance has become one of the key value offerings particularly for travel management companies, B2C online booking platforms or enablers and airlines to ensure travellers are better aware and can facilitate the additional cover, be it for leisure, adventure or business travel.
Travel insurance products are constantly evolving to meet needs of different kinds of travellers. “Nothing is more disconcerting than learning that a client encountered medical or logistical mishaps while traveling, or that they had to cancel a trip due to an emergency,” says Lucian Ale, Head of Products and Operations, Sabre Travel Network, Middle East.
“The travel protection industry is evolving, allowing us to offer innovative and creative solutions to meet customers’ needs, more product features and guarantees for both travel facilitators or enablers and travellers. Looking towards the future, the leisure sector holds tremendous opportunities. We believe travel protection to be one of those considerable revenue opportunities for both, us as well as travel management companies. Travel insurance is in its infancy stage in the Middle East, but holds great promise,” he suggests.
Ale adds that in an evolving industry, it’s all about service and product differentiation. “Sabre Travel Network is dedicated to providing travel agents with the tools needed to succeed and stand out among the rest. And travel protection is not any different. We stress upon the 3 Ps of Travel Protection to agents; show your Professionalism, Protection for customers’ financial investments and vacation plans, and Profitability maximization of every booking. Our Travel Protection tool is fully integrated within the Sabre Red Workspace with an enhanced graphical travel insurance booking tool featuring preferred suppliers.” Ale adds.
A diversified portfolio
Online Travel insurance facilitator, Tune Protect, EMEIA, have customised their portfolio to serve a wide range of travellers. Munshi says, “We have done extensive research based on travellers’ feedback as well as feedback given by travel management companies, online B2C platforms, enablers and airlines to come up with a host of coverage for various types of travellers. Apart from the standard EU Travel Insurance requirements, we have come up with a variety of plans such as Lifestyle Assurance -covering a host of specific activities such as shopping or for winter or ski destination lovers, golf enthusiast as well as adventure junkies. In January 2017, for a trek organised by Iloveadventuretravel.com to Kilimanjaro, all the trekkers had travel and medical coverage facilitated by Tune Protect, EMEIA. “Within the Middle East region, approx. 46 per cent of the population are expats. And this leads to inbound tourism both for leisure, holiday makers as well as visitors visiting family or friends. Such as health insurance has become mandatory for visitors entering the UAE (Dubai, Abu Dhabi, etc.) and everyone applying for a visit or tourist visa needs to have proof of coverage, regardless of the nationality, age or gender. For this segment, Tune Protect, EMEIA in collaboration with local insurance companies has devised the Visit Assurance Program.
“Leisure or corporate travellers often pay for non-refundable hotel, airline or even cruise packages. A dedicated plan, Travel Cancellation, was also launched to cover last minute travel cancellation due to cancellations for insurable reasons to cover the non-refundable portion of the various travel components,” he adds.
Corporate or business travellers can benefit from the Travel Easy product, which cover travel delays, baggage delay and baggage loss or damage. All the of the above products can be combined for a traveller, be it travelling to a EU or a non-EU country, to ensure various types of travellers can travel with peace of mind, Munshi observes.
Above all technology has become a key driver for all travel insurance providers and have continued to improve their technology to provide better ease of purchase as well as customer service such as efficient customer responses and user-friendly websites, supporting online enablers such as Sabre Travel Network and Distribution platforms or online enablers. Factors such as these have already started pushing the importance and growth of the sector in 2017 and beyond.