Travel insurance set for slow recovery as ‘new normal’ means fewer business trips
Grounded flights around the world has brought the travel insurance market to a standstill with the sector set for a slow recovery as business travel will be slow to return, according to GlobalData a leading data and analytics company.
Whilst business travel accounts for a small proportion of total travel insurance policies held by consumers, it nevertheless represents an important revenue stream for the sector.
According to GlobalData’s 2019 UK Insurance Consumer Survey, just 1.1% of respondents indicated that they held a business travel policy with a holiday being the most common reason for travel for 86.0% of policyholders.
GlobalData senior insurance analyst, Beatriz Benito, commented: “While the recovery of the travel insurance industry will be largely dictated by the ability – and willingness – of holidaymakers to travel, the impact of COVID-19 will have longer-lasting effects on business travel. When we have a sense of what the new normal looks like once staff return to the office, companies are still likely to continue keeping business travel to a minimum.”
Employers have a duty of care for their employees and if governments continue to recommend against all non-essential travel, scheduling business trips will be deemed a non-essential activity when technology can provide the means to run meetings remotely online.
Benito added: “It is likely that employees will return back to the office on staggered hours or on a rotation basis to manage densities. This will contribute to a generalized feeling that it is still not entirely safe to carry on with life and business as usual, leaving many employees unwilling to travel for business purposes. Equally, as coronavirus squeezes company budgets the business travel insurance sector is set to take years to recover to pre-COVID-19 levels and will lag behind the recovery trajectory of the wider travel insurance space.”