Travel insurance bookings to grow by 32% this summer

Trip cancellations and medical assistance are the main reasons.

Madrid, June 26, 2019.

With the arrival of summer, vacation planning is entering its final stretch. In addition to choosing a destination and accommodation, there is the need to purchase travel insurance to avoid potential issues. Forecasts for 2019 indicate that travel insurance policy purchases will increase by over 32% this summer compared to last year, according to data from insurance specialist InterMundial.

“While still far from the prevailing trend in Europe, where, for example, 75% of British people travel with insurance according to ABTA, the main association of travel agencies and tour operators in the UK, it seems that Spaniards are becoming increasingly aware of the importance of insuring our trips, even though only one in three currently purchases this type of policy,” notes Arturo Moreno, Product Manager at InterMundial.

While destinations such as Japan, Morocco, and Canada are the three countries for which travel insurance purchases will increase the most this summer compared to 2018, this increase will also apply to France, Mexico, the US, England, and Thailand. These are very significant growth figures, such as 163% for Japan or 100% in the case of Canada.

Just as in 2018, trips to the United States remain, by far, the ones Spaniards insure the most. The high cost of healthcare is one of the main reasons why travel insurance is considered essential before heading to North America. It is worth remembering that the bill for a simple medical consultation can reach 700 euros in this country, and a day of hospital admission can cost around 4,000 euros. Japan and Italy occupy the second and third positions, respectively, in terms of the most insured international destinations for these summer months of 2019, followed by Morocco. To all of these, we must also add those countries where it is mandatory to travel with insurance, such as Cuba, Russia, Iran, and Algeria.

Most common claims and an average refund of 1,000 euros

While 6 out of 10 claims are due to cancellations, the biggest concern for travelers is medical assistance, due to the cost of such care outside the European Union. Based on statistical data collected by InterMundial, 9 out of every 100 people who purchase insurance will end up needing to cancel or require assistance, and of those, about 20% will be medical in nature.

The United States is the country where the most medical incidents are recorded, accounting for 15% of total global assistance cases. It also happens to be the country with the highest healthcare costs, followed by Japan and Nepal respectively, territories where medical care can result in significant expenses.

However, for more than 41% of travelers, the main reason for purchasing travel insurance remains the ability to recover the cost of their booking if they cancel the trip before it begins. Currently, insurance companies cover a wide range of reasons for which a traveler can cancel without losing the amount paid: from health issues to starting a new job, or even being called for civil service exams.

Regarding the average refund provided by InterMundial to the policyholder —including cancellation costs—the figure is slightly below 1,000 euros. Although the assistance costs the insurer must cover vary greatly depending on the country where the traveler's incident occurs, the average amount is around 1,300 euros.

The proactive traveler vs. the last-minute booker

The most common lead time for purchasing travel insurance is 11 to 15 days, which shows a growing trend toward planning ahead, prevailing over last-minute bookings—even those made just hours before starting a trip—which account for only 2%. Also highly significant is the number of travel insurance policies purchased 16 to 30 days in advance.

Furthermore, so far in 2019, 16% of travel insurance policies were purchased with more than 6 months' notice. This is largely due to the fact that more and more Spaniards are opting for annual travel insurance, rather than just coverage for summer vacation trips.

Another characteristic of summer is that people have more vacation days, so the trips taken are longer than the short getaways that are more common during the rest of the year. Thus, 25% of Spanish tourists who purchased insurance during the summer of 2018 did so for trips lasting 7 to 8 days; 22% for stays of 14 or 15 days; and 21% for trips between 16 and 20 days.

This confirms a shift in direction compared to other seasons of the year, with an increase in insurance purchases for longer trips. Specifically, trips of 14 days increased by 6% and 15-day trips by 8% compared to the January-June period. Conversely, the volume of travel policies for short getaways of one to 5 days decreased slightly.

Less than 3% of the total trip cost

Although nearly 20% of Spaniards who choose to travel without insurance claim they don't buy it because they find it expensive, InterMundial's analysis of the average cost of an 8-day trip to various destinations shows that insurance accounts for less than 3% of the total trip cost. Specifically: 2.4% for a trip to New York, 2.7% to Lisbon, 2.4% to Paris, or 2.8% of the total for a trip to Cancun.

‘Brexit Effect’

While travel insurance bookings for the UK are already starting to show a slight increase due to the 'Brexit effect,' it is expected that if the country leaves the European Union, the surge will be much more significant.

“Currently, the European Health Insurance Card guarantees certain types of assistance, such as primary care and emergency services. If the European Health Insurance Card ceases to be valid after Brexit, the full cost of any medical care will have to be covered by the traveler, making travel insurance even more essential,” explains Moreno.

About InterMundial

InterMundial is the leading insurance broker specializing in sports and tourism in Spain. It has offices in Spain's main tourist cities and 7 international commercial branches (United Kingdom, France, Italy, Portugal, Mexico, Brazil, Colombia, and Poland).