Travel and Underwriting – What in the World is Going On?

There was a time not too long ago when the term “travel bug” simply referred to someone with a penchant for adventure, someone with a desire to travel and see the world. Today, that term has a far more sinister meaning as travel is discouraged, airlines are more of less grounded and many Canadians are hesitant to even visit family in the same city for fear of spreading the COVID-19 virus. Whether it be a day-trip to the beach or weeks of wandering around Europe, travel has been indefinitely put on hold. As of the start of December 2020, there have been over 65 million cases and over 1.5 million deaths worldwide due to COVID-19, with no assurance that this will end any time soon (1).

So, the question remains – what is the impact on your clients who travel or plan to travel and how does the underwriting community view the travel risk as 2020 draws to a close?

Like the medical, financial and avocational histories reported by clients on the insurance application, travel has long been a consideration at the time of underwriting. For most cases and in the best of conditions, vacation and even occupational-related trips abroad are not a concern. In other circumstances, travel to countries deemed more perilous are subject to extra premiums, coverage exclusions for death or illness and even outright refusal to consider the risk. The criteria for more conservative underwriting relates to political and social instability, limited access to healthcare if required and travel to areas considered high risk for crime and violence more easily perpetrated on a tourist.

Though the above-mentioned concerns in underwriting travel are constant, time and circumstances can alter how specific countries might be viewed. Until COVID-19, relatively few countries required ratings or exclusions and even fewer required refusal. The underwriter’s best friend is the Government of Canada Official Global Travel Advisories website (travel.gc.ca). This site is meticulously maintained, updated with no shortage of information of where to and where not to travel. Given the fluidity of circumstances, whether natural, political or otherwise, a standard risk country today may require different handling tomorrow.

COVID-19 has had quite the negative impact on travel, whether it be local, regional or worldwide. Since March, the Government of Canada advisory remains the same: “Avoid non-essential travel outside Canada until further notice” (2) – simple but clear. The Canadian life and health insurance industry has had to adjust accordingly. Is travel within Canada safe? How about a trip across the border to the United States where 90% of Canadians live within a two-hour drive of our southern neighbours? The border remains closed to drivers, except for essential services. How about a nice cruise on a luxury liner with all the amenities, including doctors and even surgical facilities? Not recommended, according to the Government of Canada. And as winter nears, the 100,000-strong members of the Canadian Snowbird Association are left to ponder whether it is best to stay or seek warmer climes and how to get there. IS IT SAFE?

If your client owns inforce insurance, life, disability or critical illness insurance, they will be covered at home or abroad, providing there are no exclusions for travel to a specific region deemed unsafe for tourism. And when it comes to travel insurance, your client still has options, although just like life, disability and critical illness insurance, there may be exclusions. The good news is that some travel insurers have begun to address the COVID-19 virus by offering coverage in case of a positive COVID-19 diagnosis.

When applying for insurance, it is important for you to ascertain the specifics of your client’s travel history. Knowing their travel location, duration of stay and the purpose of travel are essential as more than ever, travel history is being scrutinized by insurance carriers as a major risk factor during COVID-19. For example, where your client travelling to Florida would have had no issues accessing insurance in early 2019, today, coverage for travel to the U.S. may have exclusions or be denied outright – again, it depends on the destination and the case-by-case approach by the insurance carrier.

Whether we stay at home or decide to travel, staying safe may be largely behavioural at this point. The now familiar public health dicta of hand washing, distancing and mask-wearing is our best ally.

For similar a similar article on underwriting during COVID-19, please read The COVID-19 Rating Guide: Get Ahead of the Curve and continue to visit Risk Bits on Advisor Talk (login required) to determine risk and see  where in the world COVID-related travel takes us.

  1. COVID-19 Coronavirus Pandemic. December 9, 2020.
  2. Government of Canada. Coronavirus disease (COVID-19). Travel and Tourism. November 5, 2020.

This article is provided by Know the Risk, an educational website that contains underwriting information for insurance professionals, available exclusively to Advisors affiliated with PPI (login required).

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