Sep 18, 2018

4 Reasons More Travelers are Buying Insurance

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Recent events like terrorism, extreme weather, and the Zika virus have brought trip protection to the forefront of travelers' minds. There’s an “increased awareness and purchase of travel insurance by American travelers and a growing awareness of potential travel disrupters,” noted Megan Freedman, executive director of UStiA in Travel Weekly earlier this year.1

Here are four reasons why travel insurance is on the rise:

1. Influence of World Events

Due to events such as the terrorist attacks in Europe, people are concerned about new and unpredictable travel disruptions.

While some Americans are changing their destination plans to other European cities that are perceived as safer or are less expensive, others are still planning to go to cities like Paris or Brussels but with a safety net. And for those concerned about terrorism, our insurance plans can provide useful benefits for covered unforeseen and unknown events, ranging from trip cancellation to emergency medical care.

Attention from these global catastrophes raises consumer awareness of the basic benefits of travel insurance, from flight delays to trip cancellations caused by a covered illness or injury. Travelers’ purchases of our insurance policies grew by 15% year-over-year in 2016.

Additionally, travel insurance is becoming more mainstream thanks to travel experts like Pauline Frommer, Lee Abamonte, Johnny Jet and Peter Greenberg who advocate for it. Recent articles published in Travel Pulse, Travel Weekly, Skift, and Consumer Reports cite many reasons to buy travel insurance and recommend it.

2. Americans Still Want to Travel

Despite potential risks, there’s still a growing desire among Americans to travel. Whether for a relaxing getaway, celebration trip, family vacation, or for enriching experiences of other cultures, people are still taking trips. 

For some, travel insurance gives them the freedom and sense of security to continue exploring new places. Like an experienced guide or a smartphone, it’s one more practical tool that reduces their personal risk and can offer protection in the time of need.

The travel bug is prevalent among both Baby Boomers and Millennials. Nearly all Boomers will take at least one leisure trip this year, with an average of five or more trips expected. About 43 percent of them plan to travel internationally in 2017, a survey by AARP Research shows.2 Three-quarters of Millennials want to travel abroad as much as possible, compared to about half of non-Millennials.3

The overall U.S. travel market is projected to grow steadily by 4-5 percent annually through 2020, according to Phocuswright.4

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3. Increased Awareness as a Revenue Source

Insurance is no longer seen as a commodity within the travel industry. Beyond it providing better customer care, today’s travel providers and online travel agents (OTAs) that face increased competition can benefit from it as a reliable, easy source of ancillary revenue. Depending on volume, it can produce up to millions of dollars. And for agents, it’s one of the best commissions they can earn. That translates to travel insurance becoming more available to consumers.

We were the first company to partner with a major airline and an OTA to offer consumers insurance in the online booking path. Now other travel providers like hotels and tour operators are beginning to consider it as a revenue stream.

4. Better Protection for Consumers

As a whole, the travel insurance industry offers consumers more value and ease of use today. Our plans include some of the most comprehensive benefit options available, and we continually develop better products based on customer feedback. In some cases we offer robust Cancel Anytime plans through partner booking sites and agencies. And now some policies may cover care for existing medical conditions. Travel delay and baggage protection, 24-hour assistance and concierge services are among popular benefits consumers can buy today.

Thanks to advances in our technology platforms, insurance has become easier to sell by our partners in online bookings and by agents using our award-winning AgentMax Online software. And for our customers, we’re paving the way for faster, simpler online claims filing and direct deposit payments within as little as 48 hours of claims being approved.

All of these factors contribute to better, more appealing travel protection for consumers at a time when they’re more aware of the value and need for it.

As a recent article in TIME Magazine pointed out, “Travel insurance isn’t becoming just more available and affordable—it’s also more necessary.”5

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Terms, conditions and exclusions apply.
Insurance benefits underwritten by BCS Insurance Company or Jefferson Insurance Company, depending on insured's state of residence. Plan(s) may not be available in all jurisdictions. Allianz Global Assistance and Allianz Travel Insurance are brands of AGA Service Company. AGA Service Company is the licensed producer and administrator of these plans and an affiliate of Jefferson Insurance Company. The insured shall not receive any special benefit or advantage due to the affiliation between AGA Service Company and Jefferson Insurance Company. Non-­Insurance benefits/products are provided and serviced by AGA Service Company. Consumer may be responsible for charges incurred from outside vendors for assistance or concierge services. Contact AGA Service Company at (800­) 284-­8300 or 9950 Mayland Drive, Richmond, VA 23233 or customerservice@allianzassistance.com.

Citations:

1. “Travel insurance sales grew in 2016 as dangers increased,” Travel Weekly.
2. “AARP Travel Research: 2017 Travel Trends,” AARP Research.
3. “Traveling with Millennials,” The Boston Consulting Group.
4. U.S. Online Travel Overview 16th Edition, Phocuswright (January 2017).
5. “Travel Insurance Is No Longer Just for the Over-Prepared,” TIME Magazine (October 2015).

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