COVID-19 claims made up almost a third of travel insurance claims Southern Cross Travel Insurance has received since New Zealand reopened its borders in February.
While many New Zealanders are beginning to consider COVID-19 as something in the past, the pandemic remains very much alive for the travel insurance sector, Southern Cross said. The claims, many of which were caused by the virus’ Omicron variant, have caused travellers to cancel trips and delay their travel plans to see friends and family.
Jo McCauley (pictured above), CEO of Southern Cross Travel Insurance, said that COVID-19 claims have made up 32% of the total claims received across its TravelCare (international) and domestic travel insurance products since February. The average amount paid per claim is $1,943. Domestic travel claims turned out more expensive, with an average of $2,164 compared to $1,884 for international claims.
Most of the COVID-19 claims received by Southern Cross were for travel cancellation and interruptions that occurred when customers contracted the disease while on their holiday. The international destination that experienced the largest number of COVID-19-related claims was Australia, followed by the UK and the Cook Islands.
“We launched COVID cover in August 2021 because we knew this was important for customers, especially in this new environment where peace of mind is paramount,” McCauley said. “Our recent Future of Travel research shows nearly three quarters (72%) of New Zealand travellers now rank a level of COVID-19 cover in their top three most important features of travel insurance, and we’re pleased to be able to offer a good value policy which delivers support when our customers need it. It’s fair to say the combination of the opening of the borders coupled with the Omicron variant has presented a substantial operational challenge to our business of late. Our sales and service and claims teams have been managing a significant number of enquiries from customers who are naturally more concerned about how COVID could impact their future travel plans.”
Despite the pandemic being a challenging time for the travel insurance industry, McCauley said there are some silver linings.
“We’re certainly starting to see our customers engage a lot more with their travel insurance policy,” McCauley said. “We’re experiencing customers phoning us up a lot more than they used to, asking us a lot more detailed and hypothetical questions about what would occur in a certain situation. It’s fantastic to see that customers are really digging into the details of the plain-English policy they’re buying. This shows us that they value travel insurance and they’re taking the time to understand how their travel insurance will cover them. I’m really hoping that this is a trend that we’ll see continue.”