Travel insurance: COVID-19 pandemic spells uncertain times for insurers and consumers

The coronavirus outbreak has been challenging the travel insurance companies
The coronavirus outbreak has been challenging the travel insurance companies Copyright Gene J. Puskar/AP
By Mathieu Pollet
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How is Travel Insurance changing in the time of COVID-19?


People planning to travel abroad to a destination on their country's "green list" still face the risk of not being covered by their insurance.

"The pandemic exposed the loopholes and shortcomings in travel insurance policies, when too many travel insurance companies refused to reimburse consumers for COVID-related cancellations," Consumer Watchdog executive director Carmen Balber told Euronews.

Insurers have warned that the so-called green lists could clash with some governments' advice that states all non-essential travel should be avoided, rendering policies invalidated.

Travel Advice from the Department of Foreign Affairs and Trade ⚠️ Please note that the Irish Authorities advise against...

Publiée par Department of Foreign Affairs and Trade sur Mercredi 8 juillet 2020

During the coronavirus pandemic, travel insurers have had to bring tailored solutions in reaction to same-day announcements from countries.

All travel insurance policies have exclusions, and many exclude more than they cover.
Carmen Balber
Executive Director, Consumer Watchdog

Many insurers in the UK even had to stop selling policies while they assessed new risks and offered new plans accordingly. Although some eventually resumed, others, like HSBC, chose not to so they could "focus attention on existing customers whose travel plans have been disrupted".

The classification of COVID-19 as a pandemic by the World Health Organisation on March 11 "provided clarity because it set up a common general outline," AXA Travel Insurance CEO, Xavier Blanchard, told Euronews.

From then on, a majority of insurance policies would not cover coronavirus-claims because they became "foreseeable" events – especially when most governments advised against travelling.

Policy sales sink

"The sales of policies plummeted," Insurly CEO David Dumont told Euronews.

He and Blanchard both underlined how the first few weeks of the COVID-19 outbreak were challenging times for companies because they had to deal with circumstances that kept changing overnight. "The number of calls our help centres received tripled at first," Blanchard said.

The AXA Travel Insurance CEO explains that his teams reminded customers that “an insurance company should be the last resort” and that “their first step should be to follow their government’s guidelines”.

The impact of the pandemic for insurers has mostly been economic, according to Dumont. He observes that "about one-third of the companies have increased their prices, up to ten per cent”.

But he is not concerned about the industry’s future and firmly believes that things will get "back to normal" — a new requirement introduced by some countries that people arriving at their borders must have travel insurance will help in the short term, he added.

For Blanchard, the main questions now are how long the effects of the crisis will be felt concerning passengers travelling outside Europe and whether a prospective “second wave” will disrupt the industry's recovery.

He does not think travellers will move away from buying insurance as “the crisis has stressed the need for complete travel insurance, covering medical needs”.

Will pandemic risks ever be covered by travel insurance?

This is unlikely. “Insurers cannot meet all the expenses of such an event,” Dumont said, and if they did, this would lead to a significant rise in prices that would deter consumers from purchasing cover.

While the pandemic is still part of our lives, experts advise than reading the fine print when signing up for an insurance policy and going over your government’s instructions for travelling.

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