Travel insurance sales shoot past pre-pandemic levels
Older generations, which previously made up a majority of travel insurance clients, have yet to resume traveling at pre-pandemic levels.
In a first since the start of COVID-19, travel insurance sales have surpassed pre-pandemic levels, according to Squaremouth, which reports sales in the third quarter grew 84% compared with the same period in 2019.
“Squaremouth sold more travel insurance policies in the third quarter of 2021 than any other three-month space since the company was founded in 2003,” Megan Moncrief, chief marketing officer for travel insurance comparison site, tells PropertyCasualty360.com. “The pandemic has forced travelers to prepare differently for trips, to include coordinating negative tests prior to their departure, navigating vaccination mandates, and following border openings and closures. Investing in travel insurance may be the final step to make sure they have planned for the best but are prepared for the worst.”
Through a review of pre-and post-pandemic travel policies sold, Squaremouth reports international travel has started to rebound. Prior to COVID-19, international trips accounted for nearly 90% of the company’s policies. This dropped during the pandemic as more than 40% of travelers remained in the U.S. However, summer 2021 saw foreign trips make up around 80% of travel policy sales.
Although international travel is picking up, those taking trips within the U.S. are spending more. During the summer, the average cost of a domestic trip was 22% more than an international journey.
Demographic changes
Additionally, baby boomers and the silent generation, which accounted for more than half of travel policies before the pandemic, have not resumed traveling at a pre-COVID rate, Squaremouth reports. During the summer, just 25% of travelers were from these cohorts.
As a result, Gen X and millennials are now the largest demographics for travel insurance, each accounting for more than 25% of the travelers, according to Squaremouth.
“Today, there are still questions over the reliability of travel, especially in terms of border closures or vaccine and negative test requirements,” Moncrief says. “Travel isn’t as simple as it used to be. For this reason, younger demographics may be more interested in protecting their investments, whether a domestic trip or a long-awaited vacation they’ve been planning and saving for throughout the past year or more.”
She explains several other factors, including awareness of travel insurance, are also lifting the market.
“Exposure to insurance is growing from not only media or editorial outlets, but from travel suppliers and even destinations,” Moncrief says. “In addition to countries requiring travel insurance, major cruise lines announced similar requirements for unvaccinated travelers, including Royal Caribbean, Carnival and Disney.”
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