STEVENS POINT, Wis.—Berkshire Hathaway Travel Protection’s (BHTP) second annual benchmark white paper report released today identifies a potential 4.9 percent increase for travel insurance sales to Americans traveling this year. The report uses surveys and a predictive global-travel model to produce its findings, which reveal that 36 percent of consumers expect to buy more travel insurance in 2017, and nearly 61% of travel agents predict that 2017 will be a better year for travel insurance.
“Each year, we do a deep dive into travel-industry trends and forecasts to analyze the correlations and their impact on travel insurance revenues, said Dean Sivley, president of BHTP. “This report is one of the ways we seek to fulfill our mission to revolutionize the travel insurance industry.”
The report’s 10 most influential factors impacting travel insurance sales in 2017:
Travel on the rise means more trips to insure in 2017—41 percent of BHTP travelers indicate they plan to take more international leisure trips in 2017. Significantly more international leisure trips are covered by travel insurance (39 percent) than domestic leisure trips (16 percent), which appears to lead to an expected increase in travel insurance sales.
Increase in trip costs leads to higher travel insurance revenues—45 percent of travelers stated they would buy more travel insurance in 2017 because of the cost of the trip. The expected 4 percent increase in trip costs due to currency fluctuations, increases in lodging costs, airfares, cruise costs and ground transportation can lead to higher travel-insurance premiums and eventually higher travel insurance revenues.
Flight issues like cancellations and delays are among the top reason why consumers intend to buy more travel insurance—71 percent of travelers bought more travel insurance in 2016 because of flight issues like cancellations and delays. Innovative travel insurers seeking to provide benefits related to flight interruptions may succeed by meeting the needs of this segment with flight-protection coverage such as AirCare.
Increased knowledge of how travel insurance works—40 percent of consumers said they were buying more travel insurance because they had better knowledge of how travel insurance products works.
Increased use of travel agents leads to increased travel insurance sales—more than 18 percent of travelers use a travel agent to book travel and 94 percent of travel agents said they offer travel insurance with every travel sale.
Family health ranks among the top reason to buy more travel insurance—32 percent of respondents said they bought more travel insurance in 2016 due to family health reasons. Consumers’ concerns over the health of family members appears to make “cancel for any reason” coverage more appealing.
Rising interest in cruise travel for 2017 will be a key driver of travel insurance sales—nearly 38 percent of agencies said river cruises have been the top type of trip in 2016, and 67 percent expect river cruises to be the top driver of improved business performance in 2017. European river cruises ranked third on travel agent’s list of top destinations for 2017.
For consumers, 39 percent expect to take more river cruises, and 36 percent expect to take more ocean cruises in 2017. When these facts are viewed with an increase in cruise-ship capacity of more than 17,000 in 2017, travel insurance sales may see an increase, since most cruise vacations are insured.
Bucket-list and adventure travel hot travel types in 2017—76 percent of agents listed bucket-list travel as a hot trend for 2017, and 53 percent of travelers said they traveled to cross something off of their bucket list. Additionally, 36 percent of travelers said they are planning more adventure trips in 2017, and 41 percent of agents said adventure travel will be a top driver of improved business.
International terrorism is a threat to travel and a reason to buy more travel insurance—60 percent of travel agencies and 25 percent of travelers told BHTP that international terrorism was a threat to traveling, and 12 percent of travelers stated that fear of terrorism is a reason for buying more travel insurance.
Zika no longer a top-of-mind threat, leading to an increase in travel to the Caribbean—a possible 12 percent increase in travel to the Caribbean could be realized in 2017, as Zika has been declared by the World Health Organization to no longer be a “global health emergency.” Caribbean and Central America travel may also see a 10 percent increase in travel insurance sales, the largest increase of any region given the current data. Only 4 percent of respondents, however, said fears of disease epidemics are leading them to buy more travel insurance.
