Canada’s travel health insurance market is projected to top CA$865 million in 2018, and travel agents have an opportunity to increase their sales as older travelers purchase more expensive policies, and more consumers express the need for assistance in understanding policies and terms.
Speaking at the recent Travel Health Insurance Association of Canada (THIA) conference in Las Vegas, Jennifer Hendry, senior research associate of the Canadian Tourism Research Institute (CTRI), noted that travel agent sales currently account for a 17% market share.
Prior to 2009, travel agents owned the lion’s share of the travel insurance market, Hendry told the THIA conference. But today, direct sales through insurance companies and brokers account for 40% of private travel insurance purchases, with another 18% from membership associations, and 15% from financial institutions.
According to recent CTRI research, one third of travelers purchase travel health insurance online, with more than half of those stating they felt comfortable with that purchase. Their comfort level rose to 85% after purchasing online multiple times.
The International Travel and Health Insurance Journal (ITIJ) reported that Hendry told conference attendees that the top reasons for traveler discomfort are “related to the need to speak to someone on issues of clarity.” The Canadian travel insurance industry is working with regulators to better understand the issues consumers have in understanding terms and policies.
In 2017, individual-trip policy sales are forecast to grow 1.2%, while annual multi-trip policy sales are forecast to rise 3%. Since 2002, Total sales grew at a 7.6% rate through 2016, but slowed since.
Travelers purchased 4.3 million single trip policies in 2016, accounting for CA$572 million in premiums, and an average of CA$133 per policy. (Canadians can also purchase multi-trip policies.) The total number of policies was down 12.1% versus 2015, but the average premium was 9% higher, CTRI reported.
Hendry believes average premiums will rise due to the volume of older travelers purchasing insurance and the longer trips they are taking.
Of all Canadian travelers who did not purchase insurance, 30.5% did not think about getting insurance; 21.5% thought it was too expensive; 16.7% declined because their trip was only a few nights; and 8.8% forgot or thought the process was too inconvenient.
The Association of Canadian Travel Agents is working on an accreditation program for travel insurance.