The fallout on Australia’s $1.2 billion travel insurance industry is likely to be more acute after the Federal Government raised its travel advisory to a maximum Level 4 “Do Not Travel” global restriction.

Prime Minister Scott Morrison made the announcement today on the advice of the National Security Committee of Cabinet.

“Our advice to all Australians – regardless of your destination, age or health – is, do not travel overseas at this time,” Mr Morrison said.

“The decision reflects the gravity of the international situation arising from the COVID-19 outbreak, the risks to health and the high likelihood of major travel disruptions.”

It’s the first time that the Level 4 travel restriction has been imposed, and comes as the Government tries to slow the spread of the coronavirus outbreak, which has seen the number of confirmed cases rise to over 500 as of today.

Finity Principal Estelle Pearson says there will be "a significant impact in the immediate future" on travel insurance premium volumes as a result of COVID-19.

A spokesman for travel insurer NIB told insuranceNEWS.com.au today the company is “closely monitoring the impact of COVID-19, including the downturn on global travel which has flow-on effects to our business and operations”.

“Currently, our focus is on supporting our travellers by ensuring our frontline teams have the right information to assist with them any questions about their policy or travel plans.

“We’re experiencing large call volumes to our contact centre from travellers reaching out to discuss their travel plans and check whether coverage is available for COVID-19.”

Before today’s announcement of the new travel restrictions, the air travel sector was already reeling, with Qantas and Virgin Airlines cutting their flight capacities in response to lock-down measures announced globally to keep out foreign visitors.

The Federal Government’s Smartraveller website says anyone going ahead with travel plans may find their travel insurance policy voided.

A Level 4 alert means one’s health and safety is at extreme risk from terrorist attack, conflict or widespread infectious disease.