Brought to you by:

Travel insurer publishes cost of covid claims

Facebook Twitter LinkedIn Google

Southern Cross Travel Insurance (SCTI) reveals it paid more than $630,690 for covid-related claims between January 1 and May 31.

The insurer says covid claims made up 33% of total claims made this year, as the pandemic continues to impact the travel industry.

SCTI says the Omicron variant has caused many Australian travellers to cancel their trips or seek compensation for vacations hampered by active infections.

CEO Jo McCauley says the insurer has paid 82% of all Covid-19 claims, with the remaining 18% under review or declined.

“We launched covid cover in August 2021 because we knew that this was really important for customers especially in this new environment where peace of mind is paramount,” Ms McCauley says.

“Our research shows that two thirds (60%) of Australian travellers now rank a level of Covid-19 cover in their top three most important features of travel insurance.”

Ms McCauley says that the insurer made the right decision to continue to cover customers even with the advent of the Omicron variant, which increased strain on the insurer.

“It’s fair to say that the Omicron variant presented a substantial operational challenge to our business, especially at the start of the year, as our contact centre and claims teams received a significant volume of enquiries and claims from customers impacted by Omicron over the summer break,” Ms McCauley said.

“Unlike other travel insurers we didn’t pause the sale of policies in Australia. I’m very proud of how we’ve navigated this challenging period and I hope our customers are happy with their experience too.”

SCTI says that most claims made were related to medical care and disruptions caused to customers who contracted covid while on their trip.

It reported that 81% of covid claims made by international travellers were for when they contracted the virus during their trip; for domestic travellers, the number was 52%.

Cristina, an SCTI customer, spent 20 days in isolation after contracting the virus while in Spain before flying home with her insurance covering her extra accommodation, flight changes, and RAT tests.

Ms McCauley says stories like Cristina’s are commonplace and emphasises that travellers should make sure they are insured before they travel.

“We’re certainly starting to see our customers engage a lot more with their travel insurance policy,” Ms McCauley said.

“We’re experiencing customers contacting us a lot more than they used to, asking us a lot more detailed and hypothetical questions about what would occur in a certain situation.

“It’s fantastic to see that customers are really engaging with the policy they’re buying, because it shows us that they value travel insurance and they’re really taking the time to understand how their travel insurance will cover them. I’m really hoping that this is a trend that we’ll see continue.”

SCTI says that it only denied 3% of claims, citing the most common reason for denial of claims was travellers contracting covid in a high-risk zone, which most insurers do not cover.

Claimants who were not diagnosed with covid and only determined to be close contacts were also not covered by the insurer.

According to its data, the destinations that caused the most significant number of covid claims were the US, Australia, and the UK, followed by Fiji, India, and Thailand.