6 ways travel insurance has changed since COVID-19

The travel insurance industry has pivoted since the pandemic to meet traveller needs better. Here's how things have shaped to get you more for your money's worth.

Before the pandemic, travel insurance used to be seen as a mandatory and (somewhat begrudging) holiday tax.

These days, travellers are viewing it as a non-negotiable – even for those who never used to bother getting insured before they headed off overseas.

People are more invested in ensuring they are equipped with a fairly-priced policy that meets all their specific needs.

Accordingly, the travel insurance industry is rising to the task and pivoting, and as the executive general manager at Freely – a travel insurance and safety app – these are the ways I've witnessed travel insurance change since COVID-19.

Increased awareness of the need for travel insurance

It's not just COVID as a disease that has impacted travel: it's been its far-reaching run-on effects.

The beleaguered travel and tourism industry continues to reel from these implications, with severe labour shortages causing delays, cancellations, lost luggage and other inconveniences.

There's also been lots of industrial action, with aviation and rail strikes unfolding across multiple continents in response to COVID-induced inflation and poor working conditions.

The news has been splashed with stories of travel disasters ever since borders started reopening, and it's taking a long time for the industry to return to "normal".

So it makes sense that even travellers who previously wouldn't have thought to take out insurance are now seeing it as an essential.

What we're seeing now is a huge increase in the uptake of travel insurance across the majority of major markets including Australia, Canada, the US, Europe and the UK.

Especially for families and travellers aged 25 and under.

Insurers are pouring more effort into meeting the needs of travellers

The growing awareness about travel risks has led to a heightened desire to understand exactly how their coverage is going to work when they're overseas.

This means it's become increasingly important for insurers to not just respond to travellers' needs, but also communicate their coverage more effectively.

Clearer information also makes it easier for travellers to decide what policy suits their unique travel plans.

Extended, more flexible benefits and higher premiums

To address COVID-related risks, travel insurance providers have been increasing the range of coverage options they offer to travellers, which has seen the price of premiums rise.

Across the market, there's been a 50–75% rise in the cost of a policy compared to what was the norm before the pandemic.

This is driven directly by the increased cost of claims due to the new risks. We hope that when the industry normalises, our underwriters can adjust back down to align with risk levels, which would also change the cost of a policy.

To save money, customers are looking to tailor their coverage to meet their specific need such as offering car rental insurance as an optional add-on, instead of bundling the cost in with all policies. There may also be pay-per-day options for ski coverage or other activities.

By making policies more customisable, it means people pay a fairer price for the cover they want and need – rather than paying for cover that they won't use at all.

Increased interest in sustainable travel

There's been a growing awareness that travel and tourism can be a double-edged sword in terms of its environmental impact – with more and more tourism companies opting to incorporate sustainable initiatives into their operations to appeal to a new generation of travellers.

Research from Booking.com has shown that most travellers want to make more sustainable choices when they travel.

In 2021, Google recorded a 70% increase in the number of travellers seeking sustainable travel options, and Webjet has recorded a 63% increase in customers choosing to carbon offset their flights.

The increase in a more environmentally conscious approach to travel is mirrored by increased social and cultural awareness, with a global survey from Expedia Travel Group reporting that 74% of participants would choose a travel destination, lodging or transportation option that is committed to supporting the local culture and community (even if it came at a higher cost).

Better meeting the needs of all travellers

Travellers are just as diverse as the places they choose to visit, and it's about time insurers became more inclusive when it comes to catering to that diversity.

For instance, between 15% and 20% of the world's population is neurodivergent and 15% of people live with a disability. These conditions can sometimes be classed as "pre-existing medical conditions" in travel insurance, which means people will either get limited cover or pay more for cover.

But there are travel insurance companies, including Freely, that offer coverage for conditions such as autism, well-managed depression and anxiety as standard.

Improved use of technology

In an age of convenience, when everything is digital, some travel insurers are removing the difficulty associated with asynchronous communication.

Previously, if you needed to make a claim overseas, you'd have to get international calling credit and navigate time zones in order to phone your travel insurance provider during office hours.

Now, more travel insurance companies have an online claims process and 24/7 support. In the future, I expect to see more travel insurance companies offering faster claims processes through mobile apps.

Ultimately, travel insurance should be accessible so that you can do whatever you need to do when it's comfortable for you.

Originally hailing from Finland and now making his home in Australia, Miksu Vaittinen is the executive general manager at Freely: a travel insurance and safety app. Previously, he was with Fjord (Accenture) for 5 years, working with FSI clients across Brazil, Europe and Asia. Driven by a passion for human impact and with more than 20 years' experience in the digital design and software industry, Miksu is an accomplished professional and executive.