Geopolitical conflict and extreme weather dominate headlines about travel risk, but neither is the biggest challenge facing the travel insurance industry, according to Philip Hsia (pictured), chief executive officer of WorldTrips, a travel insurance expert and member of the Tokio Marine HCC group of companies based in Houston, Texas.
Hsia said the biggest shift is quieter, and it has profound implications for how travel cover is positioned and sold: a generation of older travellers is staying active for longer, travelling further and embracing experiences that would once have been considered unusually adventurous.
"The number of 90-year-olds travelling is huge," he said. Pointing to his own family, Hsia contrasted his 90-year-old father and 85-year-old mother with his grandparents' generation, who were already physically limited by their mid-60s.
That shift extends beyond where people travel to the activities they now consider routine. "Not that long ago, zip-lining through the jungle was considered an extreme activity that was high risk," Hsia said. "Now that's a family afternoon activity. That's no big deal. Everyone does it."
The insurance implication is significant. Brokers and agents selling travel cover can no longer default to assumptions about what older clients will and won't do. Hsia's argument is that the product - and the advice around it - needs to match the traveller actually in front of you, not a demographic stereotype.
Asked where the biggest protection gap sits, Hsia didn't point to a missing product. He believes travellers - and by extension, the brokers advising them - should be working through three questions before cover is placed, focusing on distance, familiarity and in-destination risk.
"How far am I going? How different is that place from what I'm used to? And what happens when I get there?"
He applied that thinking to his own recent trips - Japan, which he described as distant and culturally unfamiliar but disaster-prone, and Mexico City, which is closer to home and more linguistically familiar but presents different security considerations. Matching insurance to those specific risks, rather than buying a one-size-fits-all policy, is where many travellers still fall short.
Timing is another common misunderstanding that brokers are well-placed to address. Whether the risk is a hurricane or a geopolitical event, insurance generally needs to be in place before an event becomes a known threat for cover relating to that event to apply. Getting that message to clients early - before a situation develops - is an area where adviser intervention adds clear value.
Hsia said conflict in the Middle East, including missile and drone activity affecting multiple countries, has affected parts of WorldTrips' portfolio. But he sees geopolitical risk as cyclical rather than structural - something to manage rather than a fundamental reshaping of the market.
"Travel risk is inherent, and it kind of comes and goes," he said. While natural disasters generally have a clear beginning and end, geopolitical conflict is different. "A natural disaster kind of starts and ends, and then it's recovery. Here, it's just long and drawn out."
That uncertainty shapes decisions around policy duration, limits and whether to continue offering cover for certain destinations. Among the products Hsia believes remain relatively uncommon is political evacuation cover, which activates when the US State Department issues a Level 3 travel advisory.
"The trigger for us is a US State Department Level 3 warning, which is an objective measure, and you have 10 days," he said, during which time the insurer can facilitate evacuation which potentially includes flight costs under covered circumstances.
Hsia stressed that war exclusions are a long-standing feature of travel insurance rather than a gap unique to any one insurer, reflecting the catastrophic nature of conflict. But he acknowledged that recent events have put exactly this type of cover under the spotlight, exposing how war exclusions and FCDO advice can leave travellers with far less protection than they expect - a conversation brokers are increasingly being asked to have.
WorldTrips can track purchase activity by the day, hour and even minute, allowing it to correlate spikes and dips in demand with major news events. Hsia noted a sharp but short-lived decline after Iran conflict disrupted flights through the Middle East. "It comes back very strong," he said, describing the recovery as consistent with patterns seen after both 9/11 and the start of the COVID-19 pandemic.
One area that has not recovered as quickly is student travel to the US. "The student visas and the US government policy towards international visitors being more restrictive than in the past has definitely reduced the number of travellers coming to the US to study," Hsia said. The change has been detrimental to that segment of the business, prompting the company to focus more heavily on students travelling to other international study destinations.
While geopolitical events may dominate the headlines, Hsia believes the industry's biggest challenge will remain keeping pace with how, where and why people choose to travel - and that means the brokers and agents placing travel cover will need to stay equally nimble.
