Disasters Boost Travel Insurance Sales, But So Do Agents
by Maria Lenhart /While predicting a rise in travel insurance sales in the aftermath of Superstorm Sandy, an insurance executive said any increase is actually part of a long-term trend that owes a lot to proactive travel sellers.
This assertion by Carol Mueller, vice president of Travel Guard, is in sync with a survey of ASTA member agencies that showed travel insurance to be the fastest growing source of commission revenue during the first half of 2012. (See: Insurance is a Hot Product for Travel Sellers, Sept. 27, 2012)
Travel Market Report spoke with Mueller to hear her take on what motivates travel insurance sales, how travel agents can help clients through the claims process after disasters and more.
Is Sandy causing a boost in travel insurance sales?
Mueller: Yes, it is, but it’s too early to quantify. Anytime one of these events occurs, there are more questions about insurance, more media coverage. Whether it’s a hurricane, tsunami, ash cloud, airline or rail strike, it creates awareness. The unfortunate truth is that these are the events that put the spotlight on travel insurance.
Is the possibility of a natural disaster the best reason to buy travel insurance?
Mueller: It’s actually the more common events, like people getting sick, that point up the need for insurance. The No. 1 reason for claims is trip cancellations for medical reasons, whether it’s you or a family member who is sick. That is a far more common reason for a cancellation than a natural disaster.
This is only going to become more prevalent in the future. As the population gets older, we’re seeing more medical emergencies with an impact on travel plans.
Have travel insurance sales been increasing for awhile?
Mueller: Travel insurance has been increasing in sales for the last 10 years. There’s more awareness of the need. Prior to 9/11, only 8% to 10% of Americans purchased insurance. Now it’s close to 30%.
What role have travel sellers played in boosting insurance sales?
Mueller: Some of the increase is because travel agents have become more proactive in selling travel insurance. Agents are motivated because their commissions have gone down in other areas. They get a nice commission from insurance when it’s sold.
Agents have gotten the education on the importance of selling insurance – it has value for them and their clients too. They want to keep their clients for a long time, and insurance is part of that.
Imagine if you didn’t recommend insurance, and something happened. The agent could be blamed. It’s not only an additional revenue stream for agents, but a tool for customer loyalty.
How can agents assist their clients with filing insurance claims after a natural disaster?
Mueller: After a natural disaster, the problem is often that people can’t travel because their home was damaged. Anything that agents can do to help their clients prove the cost of the trip, helping them gather the necessary receipts and travel documentation, is important.
Agents can facilitate on their customers’ behalf. We encourage the customer to ultimately be working with us themselves, but the agent can walk them down that path.
What kind of impact do natural disasters have on your company’s bottom line?
Mueller: Claims from Sandy are trickling in now, but we won’t see the true volume for another month or so. I can’t give you a dollar amount, but Hurricane Irene last year had a huge impact as it went all the way up the coast. And it happened during August, the peak summer travel season.
What are some of the lessons to be learned from an event like Sandy?
Mueller: Hopefully Sandy will make consumers more aware of the impact that storms, and not just big ones, can have on travel plans. And you don’t have to be living in, or even traveling to, the storm zone. A storm can impact the entire country even when it hits only once area. Sandy caused flights to be cancelled all over the place.