[Asia Economy Reporter Changhwan Lee] As COVID-19 enters a declining phase and travel demand increases, travel insurance is also rapidly recovering. It is expected that demand for travel insurance will continue to grow, leading to analysis that domestic insurance companies should launch more travel insurance products.
On the 15th, the Korea Insurance Research Institute released a report titled "Post-COVID-19 Era Travel Insurance Market Outlook and Challenges," stating that the travel insurance market has shown gradual recovery since the second quarter of last year, and this year, with the full lifting of social distancing mandates, the recovery is expected to accelerate further.
In 2021, the number of new domestic travel insurance contracts reached 170,091, showing a 49.3% increase compared to 113,915 in 2020, indicating a strong recovery. The domestic travel insurance gross written premium was 4.91 billion KRW, a slight increase from 3.8 billion KRW in 2020.
The report analyzed that the paradigm of the travel market is shifting towards leisure activities centered on daily life, seeking flexibility and convenience.
It explained that travel demand is increasing for combining work and travel due to the spread of remote work (Workcation: Work + Vacation), staying in one area to minimize movement and experience the locale (Slow tourism), and outdoor and leisure activities that facilitate social distancing.
Additionally, as preferences for safe outdoor activities with family in nearby nature-friendly spaces become more distinct, demand has expanded for travel linked to daily life within residential areas or combined with activities such as camping, car camping (chabak), golf, and hiking.
Experiencing variables such as sudden increases in social distancing levels leading to cancellations of flight tickets or accommodation reservations, or changes in travel schedules, has recently led to a trend of seeking travel products that allow flexible and convenient itinerary changes or cancellations even in unexpected situations.
Overseas insurance companies are also responding to new travel coverage demands by developing new products. Although the global number of overseas travelers in 2020 sharply decreased to 27% compared to the previous year, it slightly increased by 7.4% in 2021.
In January of this year alone, the total number of global overseas travelers increased by about 18 million compared to the same month last year, quickly surpassing the annual increase of 15 million in 2021.
For example, the U.S. company AIG offers tailored coverage according to travel purposes, such as an Adventure Sports Bundle for travelers engaging in leisure activities, a Pet Bundle for those traveling with pets, and a Wedding Bundle for honeymooners.
Chubb provides travel insurance (Passport 360) for golf travelers, covering green fees for canceled golf schedules and losses due to delayed arrival of golf equipment.
Senior Research Fellow Seonghee Jeong of the Korea Insurance Research Institute stated, "For the reopening of the travel insurance market in the post-COVID-19 era, domestic insurance companies should also expand leisure and recreation coverage for ‘lifestyle travel’ linked to daily life," adding, "It is also necessary to provide travel cancellation and interruption coverage for travel convenience."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
