Today, Southern Cross Travel Insurance has revealed the impact the Omicron variant has had on its business since travel picked up as the borders reopened in late February 2022. For many New Zealanders Covid-19 is something we’ve started to put behind us, but for the travel insurance sector it is still very much alive.
The Omicron variant has caused travellers to cancel trips and delay their travel plans to see friends and family, resulting in a steady flow of Covid-19 claims.
Jo McCauley, CEO, Southern Cross Travel Insurance, disclosed that since the beginning of February 2022, Covid-19 claims have made up 32 per cent of the total claims received across its TravelCare (international) and Domestic travel insurance products in New Zealand. The average amount paid per claim is sitting at $1,943. Interestingly, the average claim paid for domestic travel sits at $2,164 while international claims average $1,884.
The majority of Covid-19 claims received by Southern Cross were for travel cancellation and interruptions that occurred when customers contracted Covid-19 while on their holiday.
“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. Our recent Future of Travel research shows nearly three quarters (72 per cent) 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.
“We’ve also received a significant volume of enquires and claims from those who have actually had their trip impacted by being diagnosed with Covid, and our own team certainly hasn’t been immune to the virus. So, all of this has meant that it’s been challenging for our customers to reach us, but please bear with us. Our team is doing their absolute best to support our customers as quickly as possible.”
Southern Cross has also revealed the top three destinations which have experienced the largest number of Covid-19 related claims from Southern Cross customers. Taking out the number one spot is Australia, followed by the United Kingdom, with the Cook Islands coming in third.
McCauley said, although customer claims are being accepted by Southern Cross, some are declined. It always pays to check the terms and conditions of any policy. The most common reasons are:
- Being diagnosed with Covid-19 while travelling to a destination the Ministry of Foreign Affairs and Trade (MFAT) has classified as a level 3 or 4 travel advisory due to the risks of Covid-19. If travellers choose to visit a destination or a region that has a level 3 or 4 travel advisory in place before they travel to the area, it is unlikely that travel insurance policies will cover any event that is related to the reason why that advisory was put in effect.
- The insured customer wasn’t diagnosed with Covid-19 themselves and was just a close or household contact which is not covered under the policy.
- The insured party decided to cut short their journey after catching Covid-19 even though the remainder of the journey was not affected by Covid-19. It’s important to remember Covid-19 cover only covers you for travel changes and cancellations caused as a direct result of contracting Covid-19. It doesn’t cover changes to the journey based on personal preference or peace of mind.
Despite it being an incredibly challenging time for the travel industry, McCauley acknowledged there have been some positives to emerge from the pandemic. “We’re certainly starting to see our customers engage a lot more with their travel insurance policy.”
“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.”
For more information, please visit www.scti.co.nz