If the travel industry expected Australians and New Zealanders to stay home when the world turned turbulent, it misread the market. Geopolitical upheaval isn’t grounding travellers, it’s redirecting them and the shift is quietly reshaping the risk landscape for insurers and brokers who offer travel cover for both individual and corporate clients. We've seen wars, airspace closures, cost-of-living pressure, a pandemic that locked borders for the better part of two years — and yet, demand on both sides of the Tasman for travel insurance has actually gone up.
“SCTI did see an increase in demand of up to 30% across some of our product range, post the launch of hostilities in the Middle East,” said Carole Tokody (pictured), CEO of Southern Cross Travel International (SCTI). “The resilience of Aussies and Kiwis around travel is remarkable - they just work out different places to go."
That adaptability is a defining characteristic of post-pandemic travellers — leisure and corporate alike. When the US political scene made North America a less attractive proposition for many, they turned elsewhere. When the Middle East conflict disrupted traditional flight routes into Europe, travellers found alternatives - different airlines, different transit points, longer connections. For corporate travel managers and the brokers advising them, those rerouted itineraries are not merely a logistical inconvenience. They are a material change in risk exposure that needs to flow through to policy terms, duty-of-care frameworks and emergency response protocols. The European pilgrimage is far from over, but the Southern Hemisphere has surged. Asia has emerged as the dominant alternative, and Japan in particular has seen a remarkable rise as a winter destination for Australians who might once have defaulted to alpine Europe.
For travel insurers, this is not merely a demographic curiosity, it is an underwriting challenge. For brokers, it is a coverage conversation waiting to happen with every corporate client that has revised its travel policy in the last two years. The claims risk profile for a family skiing in Hokkaido is materially different from one skiing in the French Alps. Japan’s medical care quality is high - but so are costs, with some insurers rating Japanese medical expenses on a par with the notoriously expensive United States market. A portfolio that was once weighted toward Europe now carries a heavier Asian exposure, and that exposure brings different frequency patterns, different severity distributions, and different logistical challenges when things go wrong.
“If more people are heading to Asia or Japan for skiing in winter rather than Europe, we’ll have a different claims risk profile to manage going forward,” Tokody said.
The implication for brokers is that blanket annual travel policies built around European and North American assumptions may now be underpriced, inadequately scoped, or both. As corporate clients expand into Asian markets - or simply send staff to conferences and incentive trips in destinations that didn’t feature in last year’s travel programme - brokers need to be asking harder questions about whether existing cover keeps pace. The shift in where Aussie and Kiwis travel is being matched by a shift in how they travel. Cost pressures following years of elevated inflation have made bargain-hunting a mainstream behaviour rather than a niche pursuit. Shorter trips, closer destinations and more economical routing are all on the rise, with more holidays at home absorbing demand that once flowed long-haul. This is a travel recalibration rather than a retreat.
Perhaps the most counterintuitive finding to emerge from SCTI’s analysis is the relationship between geopolitical disruption and policy sales. Conventional wisdom might suggest that when conflicts erupt and airspace closes, travellers cancel plans and insurers lose premium. The data tells a different story. In the weeks immediately following a major disruptive event, policy sales reliably spike - a phenomenon Tokody has observed across multiple cycles throughout a career in the industry.
The hypothesis is that disruption functions as a powerful reminder of vulnerability. Travellers who had relied on credit card cover, or who had simply not thought much about insurance, are prompted to seek proper, comprehensive protection. For brokers, the post-event spike in the retail market carries a parallel lesson: disruption events are also the moments when corporate clients most urgently reassess whether their duty-of-care obligations are genuinely being met - and whether their broker has anticipated that question or is scrambling to answer it. The awareness effect, Tokody is careful to stress, is not about insurers benefiting from tragedy - it is about consumers finally internalising a risk that was always there.
The destination shift may prove permanent or it may fade as the world stabilises - but the smartest players in the market aren't betting on the latter.
