Travel insurers ramp up staff numbers as bookings surge plus the insurance fishhooks

Travel insurers are beefing up their staff numbers again as demand rises. Photo / Getty Images

Travel insurers are beefing up their workforces again as the reopening of the border drives Kiwis to travel and book insurance but there are some fishhooks travellers need to be wary of.

Allianz Partners, the underwriters of travel insurance for AA, ANZ and Tower and a range of travel agents and brokers, has hired 14 people in recent weeks, increasing its team to around 70.

Southern Cross Travel Insurance has been actively hiring since November, when the Australian border reopened to New Zealand tourists to visit without having to go through quarantine there.

Now that quarantine and self-isolation requirements have been dropped for New Zealanders coming back into New Zealand, insurers have seen a spike in cover being taken out.

Jo McCauley, chief executive of Southern Cross Travel Insurance, said sales in the last seven days of February had risen by over 70 per cent compared with the previous three weeks.

"However, we're not yet seeing the same levels of sales as we did in June and July last year when quarantine-free transtasman travel was open between New Zealand and Australia.

"We think this is due to the immediate situation of Omicron cases building in our community. We also haven't yet hit our peak buying season where New Zealanders tend to book holidays overseas in the New Zealand winter season in search of the sun – this typically starts in about May."

McCauley said like all of those in the travel and travel insurance sector, Southern Cross had been through an incredibly difficult time over the past two years.

"In 2020 we had to make the difficult decision to reduce our workforce from 116 employees to just 45, while still supporting our customers both in New Zealand and Australia.

"To meet the anticipated new demand, we've been actively hiring since the opening of Australian borders in November and our immediate focus is on building up our contact centre and claims teams to support our customers who are really keen to get back travelling."

Allianz Partners chief sales officer David Wallace said his company had seen demand for travel insurance increase fourfold in recent weeks.

As well as individuals taking out insurance it was also seeing a rise in corporate travel policies being taken out as business travel began again.

Wallace said the travel insurance industry had downsized its staff across the board in the past two years through natural attrition and redundancies.

It was now recruiting more staff to cope with the increased workload and despite the tight labour market, Wallace said it had been going well getting new people on board.

"While staffing has reduced somewhat over the last two years, mostly as the result of natural attrition, things are ramping back up again with 14 recent new hires and a number of other roles in the process."

Wallace said many people were still travelling and booking insurance with short windows before they travel due to the uncertainty of Covid.

Those who book their insurance at the time of booking their travel are covered right away under its policies if there is any change to their circumstances like catching Covid.

Wallace said those who waited and booked insurance closer to the trip faced a seven-day stand-down period under its policy.

"One week is a long time in these Covid times."

Last month the Insurance Council released guidance stating that under current policies insurers would not cover cancellations caused by government-imposed lockdowns or a blanket quarantine.

They also won't cover travel delays caused by Covid-19, border closures due to Covid-19 or travel to any countries that have a "do not travel" alert in place.

Travellers are able to get cover for cancellation costs if they get sick with Covid-19 before they go away but this won't come as standard for most policies.

Council chief executive Tim Grafton said travel insurance with a Covid extension would typically cover being unable to travel in the event of the policyholder, or their immediate travelling companions, contracting Covid.

"Therefore, it's essential to read and check the details with individual insurers in order to be clear about what is and isn't covered before travelling, especially in relation to Covid including if a particular level of prior vaccination is a condition of cover."

Jo McCauley, CEO of Southern Cross Travel Insurance. Photo / Supplied

McCauley said Southern Cross did offer additional cover in the event that a customer was diagnosed with Covid-19 and needed medical attention, or to make alterations to their trip as a result of their diagnosis.

But there were conditions such as a requirement to be fully vaccinated and boostered, if eligible.

"The customer won't be covered if they're denied boarding as a result of failing to get the documents necessary for their journey (such as a negative Covid-19 test).

"Likewise, if a claim is connected to a government-enforced restriction or lockdown, the customer is unlikely to be covered for any changes to their journey."

McCauley said those needing to submit a claim under its Covid-19 cover would need to provide proof of the Covid-19 diagnosis for anyone who has tested positive.

"This can be a PCR test result or official documentation from a health or governmental authority confirming your positive diagnosis.

"RAT tests may also be considered if the traveller can provide evidence that they've reported their positive result to the local health authority."

Wallace said he expected to see a rise in claims with more people wanting to travel and Omicron hitting its peak infection rate at the same time.

But he expected it to settle down over time as New Zealand got through the peak of the pandemic.

Recent research by Tower Insurance, which uses Allianz for its policies, found 75 per cent of Kiwis felt nervous, anxious or hesitant at the prospect of an overseas trip.

But some 70 per cent were still considering taking one, with a visit to friends and family being a key driver.

However, many plan to take Covid into account when travelling, with 68 per cent saying they were looking for destinations with high vaccination rates, 62.2 per cent saying low Covid case rates were important and 45 per cent saying places where facemasks were mandated in public were a priority.

The research also showed that when comparing travel insurance Kiwis were focused on finding insurance that covered overseas medical and incidental hospital expenses (92 per cent), accidental loss or damage on their trip (79 per cent), unforeseen cancellation costs and loss of deposits (78 per cent), travel disruptions or delays (72 per cent), and epidemic and pandemic disease (57 per cent).