Travel insurer Cover-More’s net profit fell 31.1% to $8.2 million in the half-year to December 31, as volcanic ash disruption in Bali and a weak currency hit earnings.

Travel insurance gross written premium grew 8.3% to $202.8 million, but net travel insurance sales fell 9.4% to $71.6 million and net medical assistance sales dropped 2.7% to $32.8 million.

Higher claims costs, a one-off cost of $1 million from a legal dispute settlement, loss of contracts in the medical assistance business and investments to expand Cover-More’s global presence also contributed to the profit decline.

Cover-More will enter the $US2.5 billion ($3.5 billion) US travel insurance market after securing a partnership with Flight Centre USA. It expects to start operating by April.

“We continue to invest in the business to lay the foundations for our next phase of growth,” Group CEO Peter Edwards said.

“Our international business momentum is continuing, with [pre-tax earnings] in Asia up 75% and significant growth initiatives on track, including North America.”

Gross travel insurance sales grew 7.1% in Australia, 60% in India, 23% in China and 29% in the UK.

Cover-More’s partnership with Flight Centre has been extended to 2024, with greater participation globally.

“This extension was reached three years in advance of the end of the existing contract term and is a testament to the strength of a relationship built on a unique aligned economic interest model,” Mr Edwards said.

Cover-More operates in the travel insurance and medical assistance markets in Australia and has presence in the UK, Singapore, New Zealand, Malaysia, India and China.