The Last Word
As travel plans start to rebound after COVID-19 largely upended the travel industry, travel insurers are optimistic about the future of their market.
The once bustling hallways inside airports across the world sat empty as only a handful of travelers made their way to the gates. Cruise ships docked in their ports while bus terminals once overrun with a frenzy of passengers awaiting their next charter resembled a ghost town scene out of a Hollywood Western.
COVID-19 upended travel plans and largely shuttered an industry that last year saw more than $1.1 trillion in travel sales in the U.S.
While the unprecedented pandemic has resulted in the loss of millions of travel sector jobs and, according to a June 18 report by Tourism Economics, fueled more than $237 billion in cumulative losses for the U.S. travel economy since the beginning of March, it hasn't dampened the spirits of travel insurers.
Many expect a resurgence in travel plans and insurance policies to protect those trips in the coming months as travel restrictions imposed during the global pandemic continue to be lifted.
“The travel industry in the past has shown itself to be very resilient,” said Allianz Global Assistance USA spokesperson Daniel Durazo.
“While sales of travel insurance products have largely been paused while Americans stay home due to COVID-19, travel plans and travel insurance sales will continue to rebound in the second half of 2020,” he said.
Projections like that are already playing out in the numbers. According to a June 15 Travel Intentions Pulse Survey conducted by MMGY Travel Intelligence, about 40% of respondents expect to travel during the next six months.
While COVID-19 suspended travel plans, it also raised concerns by consumers who feared their travel insurance policies wouldn't help recover the cost of canceled trips.
Standard policies typically exclude coverage for pandemics. However, some insurers made temporary changes to their coverages.
Allianz Global Assistance USA made several temporary accommodations to provide coverage for trip cancellations, trip interruptions and emergency medical care for policyholders who become ill with COVID-19, in addition to extending refunds of travel insurance premiums to customers whose travel suppliers have canceled their trips due to the pandemic.
Allianz is also allowing customers to use their policies anytime within 770 days of the date of purchase date, and offers a 15-day “free” look option that allows consumers to review their travel insurance policy and cancel it for a full refund “if it doesn't meet their needs,” Durazo said.
Under Chubb's travel insurance policies, COVID-19 is considered a “sickness,” making it potentially eligible for coverage in accordance with policy provision, said James Walloga, executive vice president of Chubb Accident and Health.
“One example is if an insured contracts the virus and can't travel. Then their nonrefundable travel costs could be eligible for trip cancellation and/or trip interruption benefits,” he said.
The global health pandemic is raising awareness about the need for travel insurance, Allianz's Durazo said. Nearly one-quarter of Americans with future travel plans said they will “definitely” buy travel insurance and 21% said they may purchase a policy, according to results of a ValuePenguin survey released in June.