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Insurance companies note rise in travel insurance

purchases,

especially 'Cancel For Any Reason' protection

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Parametric insurance gains popularity, offering automatic

compensation for travel disruptions

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Business turn to bespoke advice on cross-border travel

By Joanna Plucinska, Doyinsola Oladipo and Henry Gale

LONDON/NEW YORK, June 16 (Reuters) - With flight

cancellations, delays and other disruptions on the rise, leisure

travellers are being increasingly discerning over the level and

type of insurance they buy and businesses are turning to

specialist advisory services to limit risk.

Since 2019, travel disruptions around the world have risen

due to everything from COVID-19, extreme weather, volcanic

eruptions, military conflict, jet safety issues, computer

glitches and fires which have closed airports, grounded planes

and stranded millions of passengers.

In the U.S., ongoing air traffic controller shortages and

aging technology have caused significant disruption. In May,

equipment outages, runway construction and staffing shortages

caused flight cancellations, diversions and delays at Newark

Liberty, one of the main airports serving New York City.

On Friday, Israel attacked Iran, forcing carriers to cancel

or divert thousands of flights to avoid conflict in the Middle

East.

Even with insurance, many policies specify a multitude of

exemptions in the fine print.

As a result, more travellers are taking out higher-end

insurance policies, often at higher premiums, to better protect

themselves, according to interviews with nine travel executives,

insurance companies and analysts.

"We're in times that are quite unstable so people are

cancelling more frequently than previously," said Duncan

Greenfield-Turk, CEO of Global Travel Moments, a luxury travel

agency based in London.

European tourists have increased their purchases of travel

insurance for this summer by 3% compared with last year,

according to German insurer Allianz Partners.

Squaremouth, the largest travel insurance marketplace in the

U.S., has seen a 34% year-over-year increase globally in

purchases of "Cancel For Any Reason" protection.

British and U.S. holidaymakers in particular are more

willing to pay a higher premium to protect their trip, said Anna

Kofoed, the CEO of Travel for Allianz Partners.

About 32% more travellers globally requested an insurance

quote from January to April compared to the same period in 2024,

according to data from online travel insurance broker

InsureMyTrip.

BUSINESSES SEEK TRAVEL ADVICE

There has also been a rise in demand for bespoke travel

advice as U.S. President Donald Trump has announced a number of

immigration-related restrictions including tighter visa vetting

procedures and travel bans.

World Travel Protection (WTP), a global firm that advises

businesses on travel risk, said it has seen a rise in U.S.

residents being detained at U.S. borders and told their

documents were no longer valid as visa rules were changing.

WTP has worked with U.S. government representatives to help

those individuals return home, according to Frank Harrison, the

company's regional security director for the Americas.

"We're seeing a very strong uptick in organizations coming

to us wanting to know how to navigate the landscape of the U.S.

within the wider business," Harrison said.

CIBT, which provides non-legal visa and immigration

guidance, has seen a 50% rise in inquiries since November from

companies seeking to better prepare their employees for travel

to the U.S., according to CEO Steven Diehl.

HIGH-END INSURANCE PRODUCTS EMERGE

One of the newest areas of business is in parametric

insurance, which pays compensation automatically after a

"trigger" event such as a flight delay without the need to file

a claim.

Parametric insurance took off in some countries during the

COVID-19 pandemic and in recent months more insurers around the

world have begun to offer it.

When testing the market last year, Spanish insurer Mapfre's

Mawdy unit in Ireland said about 11% more customers opted for

higher-tier travel insurance packages when instant compensation

was included.

Travel destinations have also spotted an opportunity in this

burgeoning market.

Marriott Bonvoy's villa rentals and waterparks offer

parametric weather insurance at the point of booking,

automatically paying out on rainy days.

Sensible Weather, one of the providers of such coverage,

reported its weather guarantees were added to 30% of theme park

bookings and 10-15% of higher-value accommodation bookings when

they were offered in 2024.

In March, Squaremouth launched a new insurance product with

cruise-specific benefits such as coverage for being confined on

a cruise ship or missing the port of call.

"Everyone is trying to make it easier for people to

understand that each trip (...) is going to have a different set

of concerns whether it's hurricanes or blizzards or what's going

on with air traffic controllers," Suzanne Morrow, CEO of online

insurance broker InsureMyTrip told Reuters.

(Joanna Pluncinska and Henry Gale in London, Doyinsola Oladipo

in New York;Editing by Josephine Mason and Elaine Hardcastle)