The summer holiday season means a raft of fresh claims and considerations for travel insurers and brokers – claims will range in complexity, but ‘balcony jumpers’ alone can face bills of up to £100,000


Insuring holiday hazards

For travel insurers, the holiday season is truly under way, and now is the time that some of their most expensive and problematic claims come through as holiday­makers injure themselves on their summer breaks.

One of the most potentially expensive and difficult claims to handle come from ‘balcony jumpers’. These are holidaymakers who accidentally injure themselves during drunken or drug-fuelled late night pranks that go horribly wrong.

AXA’s travel intermediary and partner underwriting manager David Vincent said he had received two claims so far this year, compared with four or five last year, but he expected more in the coming months.

“We have one almost every other month and we are getting into the busy season in claims terms, so I would be amazed if we didn’t get a couple in the next two to three months,” he said.

Vincent said the costs to the person involved could easily surpass £100,000 once medical expenses and air ambulance fees were factored in.
He said that AXA had added new wordings to its policies in order to exclude such events, but there would always be some individuals who would test it out.

“I’m sure it seems a good giggle at the time, but when you have fallen three floors and broken both legs and your back, and then we turn around and say: ‘By the way, we’re not paying your £30,000 claim’,” he said.

“Some we do pay. One was a guy who demonstrated to us that he wasn’t actually larking about, he just got up and put his hand on the balcony. It gave way and he fell over it.

“We were happy to pay that claim. The ones we are not happy to pay are the drink and drugs-related ones at 3am when someone is trying to get into the swimming pool or climb up the drainpipe.”

Vincent said that AXA had stepped up its customer campaigns last year to educate people about the dangers of irresponsible activities such as planking and batting.

However, Manor Insurance managing director Ian Mantel said that balcony jumper claims were so rare that the only time you hear about them is when they hit the news.

Instead, he said the more common claims were people who had an accident overseas but had no travel insurance and expected their European health insurance card to cover them.

Added to that were claims for lost possessions, such as cameras and phones.

“I always get a bit concerned where people lose valuables so easily,” he said. “If it is that valuable, then why do they lose it so easily?”

Mantel said discussing a customer’s needs and demands was key when selling them the right policy, including single or annual trips, European or world. He also advised to look out for pre-existing conditions and not always expect people to declare them.

“We have got a lot of people on our books, including kids of two or three who have had major surgery and teenagers with heart conditions. Just because they might seem young, brokers should still ask about the pre-existing conditions.

“Above all, make sure that you are looking at what the insurer needs to know.”

Market views

Is the travel insurance market changing?


Kate Niven

Kate Niven, senior travel underwriting manager, Aviva

“Travel insurance has evolved over recent years in response to changing needs of the customer. Events such as the volcanic ash cloud have meant the industry has had to consider new risks. As a result of the volcanic ash cloud, Aviva launched an optional add-on to the standard policy for airspace cover insurance and a new add-on for travel disruption cover.

“As an industry we work hard to make customers aware of the importance of travel insurance, understand that the EHIC (European health insurance card) is no substitute for a travel policy and to recognise what is and isn’t covered.
“Each year, Aviva handles many high-cost medical emergency cases where the cost exceeds £100,000. These cases range from fairly straightforward to the extremely complex.”



Steve Foulsham

Steve Foulsham, head of technical services, BIBA

“We are not aware of any significant changes in the travel insurance market in the past year, with little in the way of new entrants or exits. Those entering the market a year or so ago now appear to be stabilising their rating structure in the light of their current exposure.

“Thankfully, there have been no significant events on the scale of the ash cloud that have impacted upon the travel market in the past year. The majority of retail travel claims tend to occur in the summer months, so it is too early to understand how well the market is performing this year.”

‘Yes, in places’

chris jones head of product management first assist

Chris Jones, head of product management, First Assist Insurance Services Limited (part of Cigna)

“The economy continues to have an impact on the number of UK residents going abroad, with a 1% year-on-year reduction on overseas trips, according to the Office of National Statistics.

“It’s trips further afield, to the USA and longer haul destinations, that are suffering most. While Europe is holding up, insurers are having to work hard with medical suppliers in popular destinations to contain costs where the recession is creating upward pressure.

“Another key issue this year has been transparency when providing travel insurance, something the FSA has flagged as a key area for improvement for banks who offer policies as part of packaged accounts.”



Simon Parsons

Simon Parsons

Travel claims are not increasing in volume, but in cost, says Insure2travel managing director Simon Parsons, and inadequate insurance policies are partly to blame

Q: How have your travel claims been this season?
A: The volume of claims settled has not changed a great deal over the years, but we have witnessed a steady increase in costs per claim, and this can be largely attributed to medical expenses and, significantly, cases in Europe.
UK citizens travelling to Europe should be aware that medical costs have increased. For example, we recently paid a claim of over £90,000 for a stroke victim in Spain; this is the biggest claim we have seen in Europe.

Q: Which area of claims have been the biggest issue for you?
A: Cancellation claims for low-cost flights are often an issue because the policy excess takes a chunk out of the settlement. We have an excess waiver available, but less than 10% of our customers take the option.

Q: What have you been doing to ensure that your customers are fully aware of the wordings in their policies?
A: The Insure2travel documents are delivered by auto email and also by text message. We encourage our brokers to also provide hard copies, which we supply. The online facility we have helps the broker direct the relevant questions and provide appropriate advice.

Q: What risks are involved with selling travel insurance?
A: There are no significant risks
to the broker. However, non-disclosure of medical conditions along with failing to extend the policy to cover high-risk activities, such as white water rafting, can cause problems.

Q: Do you expect travel claims to rise over the summer?
A: Numbers of travel claims are always higher in the summer purely as a result of more people travelling at this time of year. Claims departments are at their busiest in September following the peak season.

Q: What will be the biggest issues facing travel insurers in the future?
A: Too many UK citizens travel uninsured; we believe that about 30% travel without any, or insufficient, cover. As an industry we need to get the message across better that if you do not have travel insurance when travelling abroad, you risk having to pay massive bills. Cheap policies that are often purchased online are cheap for a reason, and it’s generally because the quality of cover or service is lower. Providing reduced cover to gain sales from consumers who don’t look at the detail is a problem that could get worse as online purchases grow.