UK firm starts selling travel insurance again but rivals hold back amid Covid-19 uncertainty 

Insurer Admiral has begun providing travel insurance for new customers, including for medical expenses, but will not cover cancellations due to the virus.
UK firm starts selling travel insurance again but rivals hold back amid Covid-19 uncertainty 
A British Airways 747 plane takes off at Heathrow Airport. PA Photo. Picture date: Friday February 7, 2020. Photo credit should read: Steve Parsons/PA Wire

Insurer Admiral has restarted sales of travel insurance to new customers now the UK has once more allowed people to go on holiday, but rivals Aviva and Direct Line are yet to follow.

Major travel insurers in Britain said in mid-March they would only offer cover for existing customers after several countries, including the US, banned visitors from other countries due to the coronavirus pandemic.

Following months of lockdown, the UK government changed its guidelines to remove quarantine for travellers returning from more than 50 countries. The changes take effect today.

Admiral said on its website it would provide travel insurance for new customers, including for medical expenses and repatriation related to Covid-19. But it said the insurance would not cover cancellation due to the virus.

Admiral started selling the cover to new customers from July 7, a spokesperson said. Aviva, Direct Line and Allianz-owned LV said they were not yet reinstating travel insurance for new customers.

“Direct Line will resume the sale of new travel insurance policies once we are confident that we can provide cover that meets the needs of our customers,” a spokesperson said.

Some insurers aim to offer policies from next that would give relief during lockdown. Picture: Brian Lawless/PA Wire
Some insurers aim to offer policies from next that would give relief during lockdown. Picture: Brian Lawless/PA Wire

Pandemic-proof policies

Meanwhile, US insurers are creating products for a world where virus outbreaks could become the new normal after many businesses were left out in the cold during the Covid-19 crisis.

While new pandemic-proof policies might not be cheap, they offer businesses from restaurants to film production companies to e-commerce retailers ways of insuring against disruptions and losses if another virus strikes.

The providers include big insurers and brokers adding new products to existing coverage, as well as niche players that see an opportunity in filling the void left by mainstream firms that categorise virus outbreaks like wars or nuclear explosions.

Tech firm Machine Cover, for example, aims to offer policies next year that would give relief during lockdowns. Using apps and other data sources, the Boston-based company measures traffic levels around businesses such as restaurants, department stores, hairdressers and car dealers.

If traffic drops below a certain level, it pays out, whatever the reason.

“This is the type of coverage which ... businesses thought they had paid for when they bought their current business interruption policies before the coronavirus pandemic,” the company’s founder Inder-Jeet Gujral said. 

“I believe this will be a major opportunity because post-Covid, it would be as irresponsible to not buy insurance against pandemics as it would be to not buy insurance against fire.” 

The company is backed by insurer Hiscox and individual investors, mostly from the insurance and private equity world.

Restaurants in Florida’s Miami-Dade County, where Mayor Carlos Gimenez ordered dining to shut down soon after reopening, are now reeling, said Andrew Giambarba, a broker for Insurance Office of America in Doral, Florida.

“It’s been like they made it to the ninth round of the fight and were holding on when this punch came out of nowhere,” said Mr Giambarba, whose clients include restaurants that did not get payouts under their business interruption coverage.

“Every niche that is dealing with insurance that is affected by business interruption needs every new product they can have.” 

Pandemic exemptions have helped some insurers emerge relatively unscathed and the sector has largely resisted pressure to provide more virus cover. Indeed, some insurers that paid out for event cancellations and other losses have removed pandemics from their coverage.

British risk managers association Airmic said last week that the pandemic had contributed to a lack of adequate insurance at an affordable price and most of its members were looking at other ways to reduce risk. Reuters

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