January 2023 Market Update – Accident & Health
Prior to the COVID-19 pandemic, Australians were travelling both domestically and abroad in record numbers. Due to the significant impacts of lockdown measures, border closures and quarantine requirements, travel has significantly decreased. Over the last 5 years, it is estimated that the travel insurance market has shrunk by 20 per cent.
During the past year, we have seen borders reopening worldwide and travel increasing and returning to almost pre COVID-19 conditions.
Toward the end of 2021, the majority of insurers released advice that a travel insurance policy will respond to illness and injury related to COVID-19 in the same way as any other sickness. See our article for further details here.
The insurance market will start to build towards the pre-pandemic premium pool. Profitability and revenue will recover as demand returns to pre-pandemic conditions.
Clients that maintained their Corporate Travel policies during this challenging time are continuing to see the benefits of insurer loyalty with renewal rates lower compared to new business.
Group Personal Accident and Sickness
(Voluntary Workers, Journey, and Sports Insurance)
The Group Personal Accident industry has not been as severely impacted as the Travel industry. This is because as previously mentioned, COVID-19 lockdowns forced majority of people globally to work from home. A range of insurers offered coverage options tailored specifically to work from home conditions.
As COVID-19 has eased, most people have returned to the office part time, although a lot of employers have continued to allow staff to work from home. Despite the number of people returning to the office having increased, it is still far from pre covid levels.
Overall pricing and coverage remain steady with well performing risks seeing increases of sub 5 per cent.
The global personal accident & health insurance market is expected to grow at an annual rate of more than 6 per cent from 2022 to 2025 as people continue to return to work and medical costs continue to rise.
Inpatriate/Expatriate Medical Expenses
As people can travel again, businesses have begun to send people abroad or bring in staff from overseas again.
The difference between ordinary corporate travel policies and these policies are that travel will generally cover the insured for no longer than 180 days and inpat/expat will have more benefits such as private medical and dental.
Expatriate Medical may have an exclusion for COVID-19 related illness and Inpatriate Medical, for persons on assignment in Australia, will likely not have any restrictions.
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