Going home

The traditional British family holiday is changing. Plenty still troop to the south of France for a fortnight in August. But there is also a growing taste for adventure, and Brits of all ages are now just as likely to spend the holiday season trekking in Nepal, riding elephants in Thailand or shopping in New York.

This shift toward exotic travel has presented the travel assistance (TA) industry with new challenges. The need for a network that reaches into the globe's furthermost corners, the greater likelihood of paying for an exorbitant hospital stay in the US rather than the cheaper Europe and new government regulations on the collection and storage of confidential data has come at a time when there is growing insurer pressure on TA companies to watch their costs.

The International Assistance Group (IAG) is made up of 15 global assistance companies, with representation in the UK through First Assist. First Assist's assistance services manager, Christina Fairclough, says she has seen an increasing emphasis on cost during her time in the industry. "Twelve years ago, the emphasis was on provision of services to the traveller," she says. "Now it's a balance between that and cost."

She says exotic travel is no longer solely the domain of gap-year adventurers. And the desire of older travellers to undertake longer flights and strenuous pursuits is a growing cost for TA companies. "The older person isn't as fit as the average 30 or 35-year-old," Fairclough says. "But people rarely consider the medical facilities."

Focus on your networks
She says the new taste for far-flung destinations made the IAG's annual funding of doctors and researchers to seek out local services information for its members more important than ever. "Any assistance company that doesn't focus on its network, and only focuses on stuff like how fast they answer the phone, is going to be left behind," she says.

Fairclough says the new Data Protection Act and Access to Medical Records Act has forced up administration costs, because policy wordings have become more complex, and greater consent is needed before medical information is obtained. "The insurer must be upfront in their policy wording so that they may access information to help settle the claim," she says. "We need to seek the individual's consent in writing that we may contact their GP. And they have the right to see the GP's report before we do. It's made us focus on the administration side of the business."

GE Financial Insurance spokeswoman Priscilla White estimates that 20% of GE's travel customers ask to see their medical records before they are given to the insurer. "This does impact on the business, as additional time and staff are required to handle the case," she says.

Some of these issues are being investigated by the British Medical Emergency Services Forum (BMESF). Forum spokesman and Primary Assist assistance manager Joe Valdes says the BMESF had been an informal, gathering but plans to become more proactive in this year.

"We're considering being formally regulated, having official recognition and seeing what we can do to improve standards across the board and improve relationships with others in the industry," he says.

Valdes says TA companies had historically been involved only in the logistics of travel assistance but now require a greater range of skills to control costs and maintain their network. "Most of us are embracing the new technology, connecting better to suppliers overseas and exchanging information," he says.

Assistance costs in US huge
Travel Underwriters Group deputy chairman Graham Handy, of All Seasons Underwriting Agency, agrees that changing tastes in travel have increased claims costs.

"Families aren't going to Spain, they're having a fortnight in the States," he says. "The costs of travelling there have come down but assistance costs in the States are huge."

He says this causes insurers to put pressure to save on TA companies. "We're looking at the costs of everything, whether it's under the policy, whether it's absolutely necessary, and whether it can wait until they're back in England to do it," Handy says.

For Inter Partner Assistance spokeswoman Lorraine Dodds, and Mondial Assistance travel business development manager Simon Powell, the answer to the expanding travel horizon is that size matters.

Dodds says Inter Partner has always operated a network of 37 offices, with agents in 238 countries, so coping with the widening travel horizon is not a problem.

She says it controls the cost of maintaining such a network by using preferred providers and having local representatives who can often get a better deal.

Inter Partner recently won a contract to supply triage software to NHS Direct. It has been developing the diagnostic software for some time and is investigating its use in TA, both to provide better customer service and keep medical costs down. "If you get the right care on day one, you might not be faced with a long hospital stay," Dodds says.

Critical mass
Mondial has 35 offices and 240 representatives around the world, which Powell says is the key to coping with travel emergencies such as the ebola virus and hostage crises. And he predicts more mergers and acquisitions within the market.

"To be successful going forward, you need to be of a global size so you can negotiate with foreign organisations and have the clout that big companies have," he says. "Critical mass in this industry is essential."

Travel legal expense insurance
There are some problems that your travel assistance company may not be able to fix, which is where travel legal expenses insurance comes in.

Lawclub Legal Protection business development manager Kieran Tierney said many travel insurance packages included legal expenses cover, which was rarely used. "It's usually £5,000 in legal expenses with a worldwide jurisdiction, subject to the court case being taken in the UK, which never happens, which is why it's so cheap," Tierney said.

Lawclub's cover allows legal action to be taken in the country of the incident, as shown by the case studies below.

Mr James
Mr James paid almost £10,000 for a cruise from Singapore to Bali over the Christmas period of 1998. He is allergic to wheat, corn and rye, so made sure that the cruise operators were informed and a special menu created. This had not been a problem on previous cruises.

On the first night of the cruise, Mr James was given a marked menu, showing what would be suitable for him to eat. This was marked incorrectly, and the same occurred over the next few days. On Boxing Day Mr James fell ill even though he had only eaten marked items from the menu This happened again on New Year's Eve.

Feeling his cruise had been ruined by illness, Mr James wrote to the cruise company president. He received a reply offering a goodwill gesture of £1000 per person future cruise credit.

Mr James was unhappy with this and contacted Lawclub through his Family Lawclub policy. Lawclub then wrote to the cruise company, suggesting that a figure of £3000 might be more appropriate. Mr James was offered £2000, which he accepted.

Mr Peters
Mr Peters and his wife booked a holiday in Palma Nova, Majorca, through a high street travel agent. They specifically asked for a three-star hotel, with a child-free environment, on a flat location as Mr Peters is disabled. The price of the holiday was £810, plus £67 insurance.

Unfortunately, when the couple arrived at the hotel there were several problems. The hotel had been rated by the agent's own system as 3a but this was not equivalent to three stars, therefore the hotel was inferior to what the couple had expected. The hotel was also at the top of a steep slope so Mr Peters was unable to leave the hotel by foot without risking injury. Among other problems, the hotel was in Magaluf, not Palma Nova and their hotel room smelt of sewerage.

Mr Peters complained to the tour representative, who admitted that it was not a three-star hotel and who could not alleviate the sewerage smell in the room.

But the representative did accept that the slope was a valid cause for concern, so the couple were relocated to a holiday complex that was aimed at families and was quite far from the beach.

On their return, they wrote a letter including the above information and sent it to the chairman of the travel agent. The company replied, stating that it felt the responsibility fell with the tour operators and that they had written to them.

The tour operators issued a standard reply offering a 10% refund. Mr Peters refused this and returned it to the travel agent, who he held responsible. Letters went back and forth between Mr Peters, the travel agent and the tour operator, all blaming each other. Eventually Mr Peters contacted Lawclub through his Family Lawclub policy. After negotiations between Lawclub and the tour operator, £100 was offered, then £400, and eventually an offer of £500, which was accepted by Mr Peters.

UK bed shortages
The lack of NHS hospital places is forcing travel assistance companies to delay repatriations - driving up costs for insurers.

Travel Underwriters Group deputy chairman Graham Handy says it has become more difficult for travel assistance companies to book beds for patients being brought back to the UK.

"You can't get a bed in the UK," Handy says. "It's changed over the past two or three years." He adds that overseas medical treatment is expensive, so extending a hospital stay can push costs right up.

First Assist assistance services manager Christina Fairclough said the situation caused administration costs to rise.

"It can take hours of phone calls to organise a bed," Fairclough says. "It's taking longer to provide the same assistance, and that impacts on our staffing levels.

She said the delay had been more noticeable in the last two years. "Because of the bed situation, we can't always get a bed when we want to book one so we can't bring (the patient) back. We won't take the risk of hoping a bed will come up."

Primary Assist assistance manager Joe Valdes said the delay in finding a bed also impacted on the patient's recovery.