The travel insurance industry is under attack for policy confusion and poor advice Caroline Jordan reports on its efforts to fight back.
Travel cover has been in for a rough ride lately. The Consumers' Association recently slammed the industry for producing policies that are packed with "gobbledygook" and which consumers do not read nor understand.
And the criticism of policy wording is only part of the onslaught. The Financial Ombudsman Sevice regularly highlights problems, with one in eight of its cases relating to travel insurance.
The bullets may be flying but the industry is putting forward a robust defence. Insurers and brokers admit there is a problem, but say they are taking steps to improve clarity and make policies less complex. Many point to travel agents as being the ones who are failing the consumer.
Halifax Travel Insurance is one company that is making efforts to improve consumers' understanding of its policies. Deputy manager Paul Birkhead says: "Cover can appear confusing but there will always be some complexity as you are covering a number of areas in one policy. We have taken out some non-core areas, such as wedding and business cover, to make it less complicated."
Birkhead's major concern is the lack of knowledge of sale staff and is keen to stress the deficiencies of travel agents' cover. "It's important to ask medical screening questions," he says. "With travel agents' cover, you tend to get a blanket exclusion for pre-existing conditions. They don't have the IT to provide screening. We can tailor insurance, for example offering full cover for someone with a condition such as asthma, providing we know about it."
Fortis is another insurer taking steps to make policies clear. Paul Chaplain, Fortis underwriting director, says: "All our branded policies are in plain English. We manage our claims and assistance services in-house."
The ABI is also making efforts to improve consumer understanding. Steve Wilcox, AXA travel underwriting manager and member of the ABI's travel committee, says there are a few initiatives underway. These include requiring insurers to produce policy summaries - key points from the main document in an easily digestible format.
A further proposal is to produce standard definitions across the industry.
This would mean clarifying problem words such as "valuables","'baggage" and "relative".
"We think there would be real value in producing a type of buyers' guide to help clarify what a policy will cover," he says.
But it will not necessarily be an easy task to improve understanding of travel policies.
Perry Wilson, director of travel intermediary InsureandGo, says: "It is a complicated product that contains a number of different elements." One problem, he says, is that underwriters change cover on a regular basis, for example in response to events such as the 9/11 attack or an epidemic such as SARS.
He agrees that the way to mitigate the complexity is to have competent staff to guide consumers through the maze.
The travel agents are also hitting back at the criticisms levelled against them.
A spokeswoman for the Association of British Travel Agents (Abta) says that much of the criticism is unjustified and has been circulated by those with an interest in squeezing agents out of the market.
"The fact is that the vast majority of consumers who buy their travel policies from a travel agent are satisfied with the service they receive," she says.
She claims that more than 18 million travel policies are sold annually and yet less than 884 complaints a year reach the ombudsman. Of these, a tiny proportion are about sales by travel agents, she says. Abta's own Consumer Department handles more than 18,000 holiday complaints a year, of which less than one per cent is about travel insurance.
Yet despite these claims, ABTA is working to raise standards. ABTA has recently launched a training programme for agents. It involves two modules supplied as self-study packs followed by a written examination.
