Singaporeans more picky with travel insurance options

SINGAPORE — Travellers are becoming more discerning when it comes to buying insurance coverage for their travel plans, said industry experts that TODAY spoke to.

With the onset of the June school holidays and peak travel season, Singaporeans are now more aware about protecting themselves against unforeseen incidents, such as the recent IT outage at British Airways, which disrupted thousands of passengers’ travel plans across the world.

Last month, the case of a 62-year-old Singaporean who suffered a cardiac arrest and fell into a coma while on a family holiday in Tokyo highlighted the importance of insurance coverage.

Stranded in Tokyo with escalating medical bills, the family was forced to turn to crowdfunding in order to raise enough funds to pay the hospital and repatriate the victim to Singapore.

This was after the insurance company informed them that their insurance claims were unlikely to be successful, as the cause of the accident was due to a pre-existing heart condition.

Since then, queries from the public have arisen about aspects of travel insurance coverage and protection clauses, especially those relating to pre-existing illnesses, said Mr Derek Teo, chief executive of the General Insurance Association (GIA) of Singapore.

“The important thing is for people to seek what suits their situation best and get adequately covered, so that they are not out of pocket should an unexpected incident arise,” said Mr Teo, who has observed that increased communication through social media has resulted in “greater awareness of the risks involved when travelling”.

Local tour agency Dynasty Travel has seen a rise in awareness among its clients for protection schemes.

Up to 95 per cent of its clients now buy insurance, versus some 75 per cent two years ago, said Ms Alicia Seah, director of marketing and communications at Dynasty Travel.

“People these days are asking detailed questions about various potential risks, and are taking a deeper look into the fine lines of the contract,” she said.

For communications specialist Ms Neritta Low, 27, who is planning her June holiday trip, finalising her travel insurance package is an essential part of her checklist.

Claiming that the extent of insurance coverage would depend on the destination, Ms Low said that she relies on recommendations from family and friends to choose “the most comprehensive as well as cost-effective product”.

Compared with three years ago, AIG Singapore said it has seen an 85 per cent increase in travel claims made for high-impact incidents such as extreme weather events, disease outbreaks and socio-political

volatility. Natural disasters are the costliest, where the average claim amount is about S$2,610, the insurance company said.

Travel insurance claims relating to socio-political volatility have more than doubled in the last three years. People have had their travel disrupted as a result of political instability, coups, increased border security and terrorist attacks, noted the company.

“Consumers are looking to mitigate risks and are no longer focused on the latest deals when it comes to travel insurance … They are looking for coverage that is not only comprehensive, but also with a customer-centric approach, so as to have peace of mind when travelling,” said Mr Ignatius Chng, vice-president and group personal insurance head at AIG Singapore.

The company projects a 10 per cent rise in demand for premium travel policies, which offer a greater amount of cover.

AIG has seen a double-digit increase in the purchase of its Travel Guard policies in the first five months of this year, compared with the same period last year.

AIG Singapore issued around 800,000 Travel Guard policies last year.

The current increase in sales volumes propelled by the surge in demand may not, however, translate into higher premiums for travel insurance products, said GIA’s Mr Teo.

As the sales volume of travel insurance products have increased, so has the competition among insurers, which will “keep premium rates in check”, he said.

Mr Sherwin Loh Wei Loong, 41, who plans to travel with his family of four to Los Angeles this month, said that he is looking at travel insurance options offered through promotion tie-ins with credit card companies for added reassurance.

“I know there could be cheaper options, but a partnership with a credit card lends the insurance product some goodwill,” he said.

Mr Ankush Bhardwaj, director of lifestyle underwriting at AXA Insurance, told TODAY that “the sale of our travel insurance has definitely increased as compared with last year”.

Beyond basic coverage, travellers are looking at insurance for trip cancellations, medical emergencies and missing baggage.

The company has seen an increase in customers who do not mind paying a premium for quality travel insurance that provides “comprehensive coverage for all the various possible scenarios that may occur while they are travelling”, said Mr Bhardwaj.

The company is monitoring the situation and would refine its product features and prices according to the needs of its customers, he said.