Singaporeans are known for many things which include their financial prudency and fiscal conservatism. With that in mind, it stands to reason that as Singaporeans travel more and more around the world, their interest in travel insurance options increases. This has been happening over the years in-line with other countries around the world with the need for insurance policies to be taken out for families who go on vacation or businessman who travel frequently.
This trend was noted by insurance industry executives this past year at a NATAS travel fair in August, 2013. One major company executive announced that their company there has been double digit increases in travel insurance demand among consumers. Not only that, but consumers are increasingly choosing to purchase options with higher premiums with broader coverage.
These trends are consistent globally, with consumers willing to pay as much as 6% or even 10% of their total travel costs for so-called any reason cancellation plans, and to have the peace of mind knowing that if anything goes wrong before the big family vacation, their disappointment can be alleviated with some financial compensation. For these consumers, the value in travel insurance is not just for protection while away, but also for protection against circumstances that may force them to cancel travel plans altogether.
Although these types of claims can be made under the most comprehensive insurance policies, basic plans typically do not cover cancellations except in extreme circumstances. Most insurance claims are for the value of lost luggage and, of course , accidents or medical emergencies. From a claim value perspective, the highest claims are typically from customers who need to immediately return home for treatment, in which case the costs of medical evacuation and repatriation are covered by the insurance company.
A recent survey by Ernst and Young noted some overall trends in the insurance industry, which consumers should keep in mind. Their report, Global Consumer Insurance Survey 2012, highlighted a consumer tendency to prefer simpler product offers. AGA, for example , has made travel insurance purchases for Singaporeans with an easy-to-understand system whereby benefits are put into three categories, and insurance premiums are calculated based on which of these coverage categories the consumer chooses, as well as the travel destination and other basic variables. These options apply primarily to annual coverage plans.
According to the E&Y report, consumers are also more active in searching the internet to compare different plans and the benefits they offer. As insurance companies provide more transparency about their coverage and associated costs, consumers will continue to benefit through better information and, ultimately, a better value selection in the end. This is where the internet has transformed multiple industries and not just the travel insurance industry.
All of that is to say that continued development of the industry will not only ensure that Singaporean travelers will be better insured on their increasingly frequent journeys around the world, but they will also be able to sit back and enjoy these experiences with the peace of mind made possible through a well-chosen insurance plan.