Aussie travel insurance market forecast to shrink due to international restrictions

Selective focus of an Australian passport with a padlock on it. Metaphor for passport security, airport security or even travel insurance

The Australian travel insurance market is forecast to contract by 7.7 per cent in 2020, off the back of the reimposition of domestic travel restrictions.

Data and analytics company GlobalData released its forecast for the beleaguered sector on Tuesday, revealing travel insurance is forecasted to grow at a compound annual growth rate of just 0.2 per cent during 2019 to 2024, mainly due to ongoing restrictions on international travel.

“The recovery of travel insurance is likely to be challenging and will depend on the success of containing the pandemic in Australia and rest of the world,” GlobalData insurance analyst Deblina Mitra said.

“Even after the possible economic recovery expected from 2021, the growth of travel insurance is likely to be a subdued one.”

Source: GlobalData

The contraction in the market of 7.7 per cent this year represents a sharp decline from the 46.3 per cent growth witnessed in 2019, with insurers also bracing for refunds on planned trips and flights.

“Leading insurers such as Insurance Australia and Allianz are providing full refunds for policies falling in the lockdown period,” GlobalData noted.

“This is expected to put further pressure on the industry profitability, which is already facing challenging environment.”

The forecast coincided with the release of the World Travel & Tourism Council’s SafeTravels protocols for insurance, which have been designed to rebuild global consumer confidence to help “encourage the return of travelling”.

The guidelines, according to the WTTC, provide practical insights and guidelines around insurance for the travel and tourism private sector to equip its members with the knowledge of risks, what insurance coverage they need to look for, and how to attain appropriate coverage for their needs.

WTTC president and chief executive Gloria Guevara said: “Insurance is vital for travellers to have peace of mind and confidence to travel.

“We have worked closely with key players across the travel insurance industry to make recommendations to ensure individual travellers, groups and organisations can feel safe and confident enough to travel, sure in the knowledge they have the protection they need.

“The measures outlined in our insurance guidelines should help guide travel insurers to create products which contain every contingency needed offer reassurance to enable travel to recommence to those countries which have relaxed their border controls and travel restrictions.”

Among the key measures announced in its insurance guidelines, WTTC recommends insurers ensure audits identify and source the right partners and providers to ensure appropriate coverage.

Insurers are also encouraged to create blanket insurance and crisis management coverage to give comfort to customers, and provide a minimum base of mandatory coverage for risks posed by COVID-19.

Furthermore, insurers should also ensure there is enhanced awareness of the terms and conditions, restrictions, and coverage limits of insurance products or policies, or both.

For more information in the new guidelines, click here.


Featured image source: iStock/Lighthousebay

Latest News

  • Partner Content

Fiji Airways to bring South Australian’s closer to paradise with third weekly flight from Adelaide in April

Fiji Airways has made it easier than ever for South Australians to experience the beauty and adventure of Fiji with three direct flights a week from Adelaide to Nadi from April. Whether your clients are after a relaxing island escape, an adrenaline-filled adventure, or a convenient sun-baked stopover en route to global destinations, Fiji Airways […]

Partner Content

by Travel Weekly

Travel Weekly
  • Sustainability

Bullo River Station shares its first ever sustainability report

Bullo River Station, a vast 400,000-acre property in East Kimberley, has released its inaugural Sustainability Report, amidst 10-year partnerships with the Australian Wildlife Conservancy. Co-founders of Bullo River Station, Alexandra and Julian Burt, said the team’s first sustainability report indicates promising progress and evidence that the property is on track to achieve the goal they […]

  • Cruise Lines

Cruise Guru unveils Channel Nine cruise TV show featuring Ponant, Viking, NCL and more

Cruise Guru has unveiled “Your Next Cruise”, an immersive cruise TV show on Channel Nine in partnership with Australian media productions company, Proud Nomads. The first season consists of three 30-minute episodes featuring nine cruise lines – Ponant & Paul Gauguin Cruises, Viking Cruises, Coral Expeditions, Hurtigruten, Norwegian Cruise Line (NCL), Princess Cruises, Carnival Cruise […]

  • Famil
  • News

Explore Worldwide gives agents a chance to win an exclusive Sri Lanka famil

Adventure travel specialist Explore Worldwide has launched a new agent incentive. Travel agents can win a place on an exclusive eight-day famil trip to Sri Lanka—including 50 per cent off flights with Sri Lankan Airlines—when they book any Explore trip between 7 February and 21 March 2025. With 10 spots available, this incentive gives agents […]

  • Aviation
  • News

Heathrow Airport to upgrade operations as part of multi-billion-pound cash injection

Heathrow Airport is about to undergo a significant upgrade as it benefits from the largest investment programme in its history. The expansion plans, revealed yesterday UK time, involve expanding terminals 2 and 5, as well as adding a third runway. The multi-billion pound investment programme is 100 per cent privately funded. The plans are part […]

  • Events

AIME 2025 is underway!

If you're headed down to AIME we hope you brought your networking shoes because it's going to be big!

  • Events

IAAPA Expo Asia 2025 opens exhibitor registration

The IAAPA Expo Asia, the premier amusement industry trade show in the Asia-Pacific, has opened exhibitor registrations for its 2025 event on 30 June to 3 July in Shanghai. This international extravaganza showcases the newest technological advancements and innovative solutions in the attractions industry from more than 300 exhibitors, with over 10,000 attendees expected to […]