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RACV suspends travel cover; Allianz considers changes

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RACV has today suspended sales of new travel insurance policies in the wake of unprecedented government restrictions aimed at slowing the spread of coronavirus.

Allianz also confirmed to that it is considering changes to the travel cover it sells and plans to announce an update early next week.

“The status of new travel insurance sales is currently under review,” an Allianz spokesperson said.

Australians have been advised not to travel and to return home if overseas, and no non-resident visitors will be allowed into the country from 9pm tonight.

The downturn in global travel is expected to have flow-on effects and an acute impact is expected on premium volumes in Australia’s $1.2 billion travel insurance industry.

RACV says it is temporarily suspending the sale of new travel insurance policies as a result of the Government’s unprecedented Level 4 (of 4) advice to not travel offshore. The status of travel insurance sales will continue to be reviewed in line with Department of Health advice, it says.

“While this measure may be an inconvenience, it is aimed at ensuring we continue to put member and guest health and safety at the forefront of everything we do,” said a statement from RACV, which had already closed spas, fitness centres, pools and saunas and squash courts at its clubs and resorts and limited the capacity of dining and bar venues.

Most of its staff are now working remotely.

Insurer contact centres are experiencing large call volumes from travellers calling to check whether coverage is available for COVID-19.

Last week, Zurich-owned Cover-More suspended Australian and New Zealand sales of its Cancel for Any Reason (CFAR) travel insurance as interest in the product spiked.

CFAR was introduced as an add-on in April 2018 and was purchased by more than 57,000 people in its first year. It was sold via Flight Centre and other independent travel agents.

Cover-More declined to comment today on the status of its other travel insurance offerings.

Prime Minister Scott Morrison has advised all Australians, regardless of destination, age or health, to not travel overseas, reflecting “the gravity of the international situation arising from the COVID-19 outbreak”.

The air travel sector is reeling, with Qantas this week standing down 20,000 workers – two-thirds of its staff – after suspending all international flights and slashing domestic capacity amid a collapse in global travel. More than 150 aircraft have been temporarily grounded.

A $700 million government package, which waives a range of charges on airlines, has been introduced to prop up the industry in Australia as airlines around the world face a potential financial collapse.

A Level 4 alert means one’s health and safety is at extreme risk from terrorist attack, conflict or widespread infectious disease. The Federal Government’s Smartraveller website warns anyone going ahead with travel plans “may find their travel insurance policy voided”.