New Zealand travel insurers have a documented and growing medical claims exposure in the family travel segment, and new AA Travel Insurance research quantifies the behavioural patterns behind it. Southern Cross Travel Insurance paid more than $7.3 million across 3,350-plus medical and evacuation claims between January and November 2025, an average of $2,181 per claim, with both volume and total amounts rising from 2023 and 2024 levels. Gastrointestinal illness, respiratory illness, fractures and falls were among the primary drivers - conditions that children on family trips encounter with regularity in destinations such as Southeast Asia and the Pacific, which AA Travel Insurance booking data shows remain among the most popular choices for New Zealand families in the July 2026 school holiday period.
The AA Travel Insurance survey, conducted via Ideally with more than 800 respondents and published July 1, 2026, found that 67% of New Zealand parents anticipate stress on family trips and that parents encounter an average of four stress triggers per journey. Illness and injury concern ranked as a top-three stressor, alongside keeping children entertained and unexpected costs - the same claim categories that SCTI's data shows are generating growing financial exposure. The survey was not designed as a claims predictor, but the overlap between the stress triggers parents identify and the claim categories that are rising in frequency and cost is analytically relevant for underwriters assessing family segment risk.
Family holidays are the top travel priority for 54% of New Zealand respondents per SCTI's Future of Travel report, ahead of beach breaks at 34% and cultural experiences at 28%, against a backdrop of outbound travel growing 6% to 3.51 million overseas visitor arrivals in the December 2025 year per Statistics New Zealand. A segment growing in volume and generating rising claims costs warrants closer attention to how family travel products are designed and priced.
The claims exposure is occurring in a market with a measurable underinsurance gap. A May 2026 AA Travel Insurance survey of more than 1,200 adults found that 61% of respondents considered it unlikely or impossible they would need medical treatment overseas, only 48% purchase travel insurance on every overseas trip, and 21% rarely or never arrange cover. The same research found 22% of respondents had no clear plan for funding medical treatment if an emergency arose abroad. SCTI's domestic data reinforces the risk perception gap - 7.9% of domestic travel policies resulted in a claim in the year to April 2025, with an average payout of $1,170, confirming that local trips perceived as lower risk still generate material financial exposure.
Ben Rose, head of financial services at the AA, said travel insurance should be standard pre-departure preparation for families, with adequate cover for cancellations, medical and dental emergencies and activity-specific risks including snow sports, adventure activities and cruise travel.
For licensed insurers, the family travel segment intersects with active regulatory obligations beyond product design. From March 31, 2025, insurance companies in New Zealand were required to hold a financial institution licence and create a fair conduct programme under the CoFI regime. In June 2026, the FMA published an insights document on how insurers are handling incentives under CoFI, noting that non-monetary benefits and short-duration sales campaigns promoting products are considered incentives that can heighten the risk of unfair treatment of consumers. That guidance applies directly to family-focused promotional campaigns such as complimentary children's cover offers - a standard feature of the family travel insurance market.
Looking ahead, the Contracts of Insurance Act comes into effect on November 15, 2027, with the FMA's May 2026 letter to insurers making clear it expects CoIA implementation to be treated as a substantive reform requiring clear accountability and proactive planning - including how underwriting questions are asked, how disclosure is assessed and how remedies are applied. Family travel products, with their reliance on pre-departure declarations about children's ages, health conditions and planned activities, sit directly in scope of those implementation questions.
