Ukraine war sanctions raise questions for travel insurance companies

Ukraine war sanctions raise questions for travel insurance companies

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“Do not travel” warnings protect travel insurance companies in the countries directly affected. The war in Ukraine could also increase consumer awareness and demand for extended coverage.

Paula Krizanovic

Russia’s invasion of Ukraine is leading to increased activity for travel insurance companies, as flight cancellations and tour operators cutting off their trips to Russia have led many travelers to question whether travel insurance policies insurance will cover disruptions to their travel plans.

“We have seen an increase in the number of travelers calling us asking how travel insurance would help them if their trip was affected by war. People are understandably worried,” said Angela Borden, product marketing strategist at Seven Corners Travel Insurance.

While several travel insurance executives believe the travel insurance industry has not been directly affected by the conflict or the unprecedented financial sanctions imposed on Russia, the storm is far from over. the United States, UK and Australia have asked their citizens to leave Russia as soon as possible in addition to issuing warnings not to travel to Ukraine and Belarus.

These warnings trigger a war disqualification, rendering any benefits invalid in countries directly involved in any conflict.

Federico Tarling, director of services for International Assistance Card, explained that his services only exclude events caused by war or which are a direct consequence of it. “Due to force majeure circumstances, Assist Card cannot guarantee the availability of its suppliers, and if so, we will issue refunds,” he said.

Outside of traditional insurance companies, there are specialist plans for people who work or travel in hazardous areas – from NGO representatives and politicians to doctors and first responders. Dan Richards, CEO of world rescuea company that provides such critical services, confirmed that it has already seen an increase in demand.

“Uncertainty usually translates to an increase in our business,” Richards said. “Our operational teams are helping people on the ground around the clock, and also, the perceived danger is making more people want our membership.”

The future of travel insurance

“The industry shouldn’t (be hard hit) by the cancellations caused by this terrible event,” said Daniel Durazo, director of marketing and communications for Allianz USA, who is donated more than $13 million (€12 million) to the International Red Cross. “Nevertheless, we have not yet received any calls from customers traveling to Russia. We are here to help you. »

One of the consequences of the war could be the modification of existing insurance products. “People will want to know that they are covered financially in case of war in Europe. And on our side, I think they will want medical and emergency response as well,” Richards said.

“If people stop traveling altogether, business could decline. But it’s more likely that they will adjust their schedule and destination,” Borden said when asked about the possibility of the dispute continuing. “Some travelers may be more likely to purchase travel insurance with Cancellation for whatever reason. This is the only way to have additional assurance that they can cancel their trip and be reimbursed.

She doesn’t believe the events will affect the cost of insurance for leisure travelers, something Tarling agrees with.

“The value of travel insurance may not be affected, although it’s clear that many travelers will lose purchasing power,” Tarling said, adding that soaring oil prices will impact costs. operational and may result in higher fares.

Nonetheless, the Assist Card executive believes the trend for consumers to acquire extensive coverage, which has grown during the pandemic, will continue.

“(We see) that the demand and (reach) for our products will remain stable, due to a greater awareness of the need to travel protected with a broad and reliable service,” said Tarling.