Travel Insurance: Product and Actuarial Challenges, Australian Perspective

Travel insurance is a "gap" product, covering losses not addressed by domestic health, home contents, motor, income protection, and liability insurances, a structure that varies globally depending on how domestic health systems treat overseas medical costs. Thus it has additional complexity from a design and pricing perspective.

Core covers include trip cancellation, trip interruption, medical emergency, evacuation, repatriation, luggage, travel delay, accidental death and disability, assistance, and liability, subject to common exclusions such as pre-existing conditions, risky activities, war, self-harm, and provider insolvency.

Australia is a significant market globally due to high travel propensity, larger average premiums, and limited reciprocal health agreements.

The presentation will go into understanding the drivers of pricing and claims volatility (including destination, age, trip length, lead time, excess, cruise risk, pre-existing conditions, and adventure activities, compounded by long booking lead times and single-trip policy structures).

Discussion of key insurer challenges include customer and claims issues.

The presentation will go into some of the interesting actuarial challenges including understanding earning patterns and catastrophe exposure.

This presentation focuses on the issues from an Australian market perspective which might be useful in understanding risks in your own market.

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