How The Travel Industry

is Coming Together in Turbulent Times

EDITORIAL TEAM
 
SOSA

Undoubtedly, one of the industries hit hardest by the pandemic has been travel and aviation. Between borders closing, flip-flopping regulations, nationwide lockdowns and ongoing pressure to shelter in place, the air travel industry has faced a whole storm of turbulence. In addition, the need and desire for passengers to fly has dramatically decreased with business trips and vacations put on hold indefinitely. This coupled with the fear of an unknown virus, and the regular stresses of flying has made hopping on a flight especially unattractive to customers. Needless to say, this once essential industry is experiencing the detrimental economic consequences of COVID-19. Nevertheless, airlines, insurance companies, hotels, and even countries have been quick to adapt to this changing reality.


"With these new (airline) regulations, experts argue the risk of virus transmission during a flight is actually fairly low."

A New Paradigm in Aviation

Airlines are going to great lengths to make flying as safe as possible and feel like it too. Airlines now offer better, onboard hospital-grade air filtration than ever before, mandatory mask requirements, and social distancing at terminals and on board when possible. Boeing even invented an UV wand which airline attendants use to eliminate the virus from out of reach and absorbent surfaces. With these new regulations, experts argue the risk of virus transmission during a flight is actually fairly low.


Furthermore, airlines are offering relatively cheap flights with lenient cancellation or flight change regulations and an overall accommodating approach, even if it's at their expense. Some airlines such as Emirates went a step further and were first to offer free COVID-19 insurance for all flights and holidays, setting a new precedent for the travel industry. Etihad also began offering COVID-19 insurance with no extra charge for passengers who are diagnosed with the virus during their trip. Hot on the trail of this trend is Virgin Atlantic, now offering free COVID-19 insurance for all of its passengers.

group of 22 people swimming off the Amalfi coast in Italy.
Photo by Caroline Grondin
A Safe Destination

Hotels, and even countries, have followed suit offering versions of pandemic insurance policies - all in the name of attracting travellers and keeping the tourism business afloat, employees paid, and the economy moving. For example, the Portugal tourism board is now offering COVID-19 travel insurance for purchase. Similarly, the Canary Islands’ government signed an insurance policy ensuring travellers who have contracted the virus will have all of their expenses paid. Luxury hotel provider The Greek Villas has added a new insurance product for their guests, including coverage for travel cancellation (full money refunds), accident and health (including COVID-19) and personal liability. Other countries include Canada and the Dominican Republic.

Insuring against the Unknown.

For a customer travelling to a destination other than the ones mentioned above, or on an airline who didn’t keep up with the changing times, they may find themselves in a tricky situation insurance-wise. Today’s travelers may have a hard time finding an adequate package which covers not only baggage loss and damage but the all too necessary cancellation and health insurance incidentals. Those venturing abroad are stuck between travelling without all the boxes ticked and forfeiting their trips.

With the reality on the ground constantly evolving, insurance companies big and small weren’t able to create products fast enough. At the beginning of the pandemic, they found themselves losing money on two fronts due to a sudden decrease of people flying, and those who did travel claiming their insurance en masse and requiring payouts. 

"Hotels, and even countries, have followed suit offering versions of pandemic insurance policies - all in the name of attracting travelers and keeping the tourism business afloat, employees paid, and the economy moving."
man and woman standing beside concrete seawall looking at beach with two suitcases besides them
Photo by Vidar Nordli-Mathisen

Adding jet fuel to the fire, the process of insuring during a global pandemic has turned out to be unpredictably complex. Not only due to forecasting uncertainties and increased financial risk, but because of the wide-angle effects the pandemic has on a traveler’s daily life (not to mention a family of travelers.) Companies not only have to consider insuring for hospital expenses, but also isolation expenses. The “what if’s” and “worst case scenarios” are simply too numerous. The risk assessment when dealing with an entirely new threat such as the one we’re experiencing is total uncharted territory.

Despite all of this, some global insurers that put a pause on travel policies altogether are now re-launching or expanding their offerings. These changes have largely focused on enhancing the policies themselves rather than crafting all new pandemic specific ones. A few key examples of policy changes include: AXA Gulf’s policy which now covers Covid-19. Chubb‘s travel insurance policies on the other hand, consider COVID-19 as a “sickness,” potentially making policy holders eligible for coverage in accordance with policy provisions. Another example is Allianz Global Assistance that made several temporary changes to their policies. The insurer, Admiral  has also started selling travel insurance policies to new customers. While this may be a good start, travel insurance that includes pandemic coverage is far from universal.

New Opportunities in a Collaborative Travel Industry

There’s no doubt that the world of travel post pandemic has forever changed in the same way it changed post 9/11. Even travelers who may have been reluctant to purchase insurance in the past thinking “what’s the worst that can happen?” have experienced it first hand.

As of today, those who did always purchase insurance from insurance companies no longer need to do so - they receive it free of charge by airlines and hotels. Although the consumer receives this coverage by airlines, hotels, and even countries - insurance companies are the ones backing and enabling these new product offerings. On trend with these unprecedented times, we’re seeing new partnerships between insurers and different players in the travel industry in order to keep wings in the sky and tourism moving.

iPhone 11 Pro displaying new SwissCovid App.
Photo by Pascal Brändle
"Companies that were already incorporating digital tools such as tele-medicine into their products pre-pandemic as a novelty, will now need to include it to maintain their competitive edge and attractiveness to insurance-eager travelers."

Further supporting the partnerships amongst traditional travel stakeholders, is the technology that allows them to adapt in a much quicker manner. Companies that were already incorporating digital tools such as tele-medicine into their products pre-pandemic as a novelty, will now need to include it to maintain their competitive edge and attractiveness to insurance-eager travelers. Digital platforms that facilitate both face-to-face and remote care will help insurers and their hotelier partners turn challenges into opportunities. We’re already seeing the way startups such as battleface that keeps travel insurance simpler and leaner for the consumer, and Air Doctor - a marketplace that matches physicians and patients while traveling, are being implemented in the travel insurance field. For the travel industry catering to a now more fearful and more digitally connected (after months of socializing on screen vs. in person) consumer, the answer lies in reaching them right at their fingertips every step of their journey.

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