What gives travel insurers “a lot of reassurance”?
What gives travel insurers “a lot of reassurance”? | Insurance Business New Zealand
Travel
What gives travel insurers “a lot of reassurance”?
Chief customer officer talks to Insurance Business about Kiwis’ behaviours
Travel
By
Terry Gangcuangco
With more than four out of five Kiwis planning to travel domestically and 61% keen to take overseas trips this year, just how promising are the prospects for New Zealand travel insurers like Southern Cross Travel Insurance (SCTI)? Insurance Business recently sat down with SCTI chief customer officer Nick Bassett (pictured) to find out.
“The challenges of the last 12 months are not putting people off travelling over the next 12 months,” Bassett said. “And when we compare the results to when we ran [the “Future of Travel”] survey in 2023, more people are planning to travel internationally over the next 12 months than they were for the same period last year. So, that confidence in travel has grown.”
In fact, of those polled this year by research agency YouGov on behalf of SCTI, 51% of respondents with travel plans consider travel to be one of the most important things in terms of discretionary spending. More notably, nearly 10% said it was their number one priority when it comes to non-essential expenses.
“I think they’re considering the way of the world at the moment,” Bassett shared. “I think people need that escape; they need that getaway. So, they will be thinking about doing it, but how they travel is likely to change – they might not be travelling for such long periods or they might not be travelling as far away.”
People are travelling – but are they taking out insurance?
With the appetite for travel continuing to be strong, the question for the industry is whether this keenness translates to insurance take-up. In SCTI’s experience, the answer is ‘yes’.
“There are insights that indicated whether people will continue to take out travel insurance, and we saw that 90% of those we surveyed will continue to take out travel insurance for their trip,” Bassett told Insurance Business. “So, despite pulling back on some of that discretionary spending, travel insurance does seem to remain a priority.”
The chief customer officer went on to highlight: “The outlook is positive. At the very end of last year, leisure travel reached 2019 volumes for the first time. So, we’re now back to normal… And that’s why it’s so important to know what is currently happening that’s influencing New Zealanders’ behaviours.”
For instance, knowing that price is an important consideration means the insurer can work on addressing the issue of affordability by offering consumers policy options and flexibility.
“Price has always been important to people when they’re comparing their travel insurance options, but it shouldn’t be in isolation,” Bassett said. “In my view, you should be looking at the value that you’re receiving for the product that you’re choosing.
“It’s understandable when you think about the study, in that it’s indicating that the cost-of-living is having an impact upon consumer choices… But they are still considering insurance – that’s one of the key takeaways.”
According to SCTI, it paid out nearly $20 million for international travel insurance claims in 2023, with medical & evacuation claims accounting for 41% of all claims paid in terms of value. The insurer’s most expensive claim last year amounted to more than $1.4 million.
Bassett remarked: “How can we use the insights to inform the experiences that we give to New Zealanders? What do they expect of their insurance provider? What do they expect of their cover? And what role do we play in their dream holidays and being with them on that journey? Is it a passive partner or is it an active participant? Or is it somewhere in between?
“For us, it’s making sure that we are there for New Zealanders when they want us to be.”
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