New Articles

The Importance of Protection: Travel Insurance in the Post-Pandemic Era


The Importance of Protection: Travel Insurance in the Post-Pandemic Era

As seasonal trends and demand patterns in the travel market begin to take a more familiar shape after three years of being dominated by the pandemic’s influence, we can see which aspects of travel have fundamentally changed since 2020. One of those is the prevalence, popularity, and outright necessity of travel insurance. 

This makes natural sense. Covid-19 has made consumers more inclined to purchase travel insurance to protect their trips from illness, rebooking and cancellations. The huge travel demand spike in the early summer of 2022 was accompanied by a corresponding rise in flight cancellations, missed connections, lost luggage, and interrupted trips, further underscoring travel insurance’s value. Travel insurance is a natural, rational hedge against uncertainty and instability, neither of which has been in short supply over the past few years.

Travel insurance sales and selection soar

Recent travel insurance sales and attachment metrics support the notion that travel insurance is a greater priority for travelers than ever before. While the latest official figures from the United States Travel Insurance Association (USTIA) show that Americans spent approximately $1.72 billion on all types of travel protection in 2020 – a drop-off from previous years due to the pandemic’s impacts on leisure travel, other industry sources show a considerable rise in travel insurance adoption as travel has resumed. 

Battleface, an international travel insurance provider, found that while only about 20% of American travelers bought travel insurance before the pandemic, nearly 60% now purchase it. Similarly, Squaremouth, another global travel insurance provider, reports that 79% of travelers are selecting trip cancellation coverage in 2022 compared to 60-65% pre-pandemic, and overall policy sales were up 180% year over year in June.

We see similar patterns on the arrivia booking platforms across multiple travel products. We saw a significant spike in travel insurance attachment rates for air bookings in the second half of 2021 as air travel resumed and more modest year-over-year increases in recent booking periods. Customers who book cruises are even more inclined to purchase travel insurance – attachment rates for cruises are about 50% higher, on average, as for air bookings, according to our platform data – and this coverage saw a double-digit YOY increase in a recent booking period as well.

Travel insurance is table stakes

It’s clear that travel insurance is now a permanent fixture of the travel experience and is an important consideration as consumers book their trips. What does that mean for loyalty programs, financial services brands, and other organizations offering travel rewards or booking capabilities?

First, travel insurance must be among the options made available to members and customers. It should be prominently featured and easily attachable to any booking, particularly for high-dollar-amount options like cruises and flights. Travel insurance helps people feel safe and offers reassurance to travelers who are all too aware of the potential for disruption and lost opportunities. 

It also means there’s an opportunity to increase ancillary revenue or redemptions by offering travel insurance as an option. As overall travel booking volumes continue growing, adoption metrics suggest that the demand for travel insurance will continue to rise alongside it. That indicates the potential for additional ancillary sales for programs and organizations that offer travel insurance as an add-on for purchase and the opportunity to boost redemption rates for those that make travel insurance redeemable for points or miles. The revenue benefits are apparent; the redemption benefits can help loyalty programs reduce their points liability and increase engagement among members.

Lastly, it means companies and organizations should seek a travel benefits provider that includes a travel insurance offering on all travel products. At arrivia, we work with the world’s most reputable travel insurers to provide a broad range of coverage on cruise, air, hotel, resort, car rental and tour bookings. Travel insurance options are fully integrated into our platform and, like all our products, can be deployed seamlessly under our customers’ branding. 

Our ability to be a one-stop-shop – providing both the travel options and value travelers demand, as well as the ability to protect their bookings with robust insurance – sets us apart from other travel benefits providers and helps our customers deliver more complete and positive travel experiences to their customers and members. 

The appeal of travel insurance is a legacy of the pandemic that will impact the travel market for the foreseeable future. Is your organization prepared for this new normal?

About the author

Mike Nelson is arrivia’s Chief Executive Officer. Prior to arrivia, Mike was the Chief Executive Officer, Americas, for the international insurance company Allianz Partners’ Global Travel division.



Back to Growth: U.S. Business Leaders Have Rosy Outlook for Economy

The COVID-19 pandemic has affected every aspect of our work and life.

Business executives have had to quickly reconfigure operations, and millions have had to unexpectedly work from home or cease work entirely. Videoconferencing has become the killer app, and Zoombombing became a new privacy concern.

Despite the widespread health and business challenges brought on by the coronavirus, two-thirds of U.S. business leaders are optimistic the domestic economy will recover within a year, according to a survey TMF Group recently released.

It’s an encouraging sign that business executives in the U.S. are expressing this type of optimism, particularly based on the unprecedented challenges experienced throughout the economy over the last few months. This group was obviously very confident before the onset of the pandemic, and they now seem eager to not only restart their businesses but help reignite the economy as well.

We conducted the survey in the middle of April to gain insight into how companies plan to navigate these uncertain times. More than 40 percent of the 300 decision-makers who took part in the poll work in companies with more than 5,000 employees. Most of the respondents (85%) said their companies do business outside the United States.

Nearly a quarter of respondents (23%) expect a V-shaped economic recovery, meaning a dramatic bounce to pre-virus activity by the end of 2020 following the sharp collapse. Only a small minority (12%) anticipate the economic impact of the pandemic to the last two years or more.

Looking beyond the U.S., business executives were a little less optimistic but still positive: 56% of respondents said the global economy would recover within a year.

It may be easy for critics to judge the survey takers as stereotypical American optimists, but I believe their confidence is grounded on some key facts. The economic shock has been largely demand-driven, as travel restrictions and government stay-at-home orders shut down wide swaths of the U.S. and global economies. Many of the world’s governments acted quickly to offset the economic damage. In the U.S., the federal government and central bank organized a massive stimulus package and pumped trillions of dollars into financial markets. More than 60% of respondents said the financial support to workers and businesses in the U.S. has had a very positive or somewhat positive effect on their companies.

Now, as states allow more businesses to reopen, consumers are eagerly venturing out despite the ongoing health risks. As consumer and business demand rebound, companies will begin hiring again.

Indeed, business decision-makers are confident their businesses will rebound quickly. More than half say their companies will return to normal operations within six months.

In times of crisis, there’s a premium on bold leadership and decisive action. Resilient leaders continue to mount appropriate responses to the global pandemic while charting paths to recovery.

The survey underscored that the pandemic has forced business to rapidly evolve. Many are moving ahead to reassess, reimagine or reinvent their businesses. Thirty-six percent say they plan to accelerate plans for international expansion, and 32% plan to seize domestic growth opportunities.

It’s a positive sign that the strategic imperative to go global remains strong because COVID-19 has dealt a serious blow to the international system. The World Trade Organization predicted in April that world merchandise trade would plummet between 13% and 32% this year.

But the factors that have driven globalization for several centuries have not disappeared. People have been driven to seek profit internationally since the earliest days of the Silk Road, and this instinct will continue. Furthermore, the spirit of international cooperation has been strong in the response to the pandemic. Companies, government agencies and nongovernmental organizations are working across borders to solve problems at scale, such as developing a vaccine for the coronavirus.

A big motive for international expansion is the diversification of supply chains, cited by 35% of respondents. The coronavirus has interrupted the flow of goods across borders, from raw materials to finished products. The disruption has vividly illustrated that today’s highly interlinked, international supply chains have more potential points of failure and less margin for error for absorbing delays and disruptions.

Reducing dependence on one country or region is a priority. Diversifying your supplier base may increase costs in the short-term but will make your network more flexible and agile and potentially reduce the economic shock of future disruptions.

The outbreak of COVID-19 forced business to reassess every strategic objective and business plan. The health crisis has exposed vulnerabilities and created unforeseen challenges.

As businesses around the world consider how they can return from the economic crisis unleashed by COVID-19, the survey results provide some food for thought. Expanding internationally or domestically in uncertain times, for instance, may seem counterintuitive but could also fuel faster growth. Severe adversity provides real perspective. It is possible to find strength and confidence in the face of real hardship.


TMG Group is an international professional services firm that provides administrative support services across multiple jurisdictions.