Prepare Travel Insurance for the Vacation Season

Rising Travel Demand Boosts Interest in Travel Insurance
"Direct Local Medical Service Provision Requires Response from Insurers"

As overseas travel recovers to pre-pandemic levels and the vacation season begins, interest in travel insurance is also growing. Travel insurance has become an essential item for travelers as it covers not only medical expenses due to injury or illness during travel but also liability for damages to others and damage to electronic devices. Accordingly, insurance companies are focusing their efforts on travel insurance.

According to industry data on the 11th, the number of new travel insurance contracts from January to April this year at five major large non-life insurers?Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance, and Meritz Fire & Marine Insurance?was recorded at 439,727. This represents a 568% increase compared to the same period last year (66,827 contracts). When narrowing the scope to overseas travel new contracts, the increase rate rises to 666%. Compared to 2020, before COVID-19, the scale has grown by 84%.

Kakao Pay Insurance, which had not previously offered any specific insurance products, has also entered this market. On the 9th, it launched 'Overseas Travel Insurance.' Unlike existing overseas travel insurance policies where mandatory coverage is fixed by policy, this product allows users to freely add or remove desired coverage. For example, selecting only personal belongings damage coverage (KRW 400,000) costs KRW 1,850, and selecting only flight or baggage delay coverage (2?4 hours) costs KRW 390. Additionally, there are benefits such as discounts on premiums when signing up together with companions.

Samsung Fire & Marine Insurance is also targeting customers through its overseas travel insurance product, 'Samsung Fire Direct Chac.' It provides compensation not only for accidents or distress occurring during travel but also covers various inconveniences.

For instance, if a flight is delayed, the 'Digital Flight Delay Compensation Service' notifies the insured of the delay and assists in accessing airport lounges. However, the 'Flight/Baggage Delay and Cancellation Additional Expenses Rider' must be subscribed to. There is also a 'Home Theft Damage Rider during Travel,' which covers losses such as theft or damage caused by robbery or burglary during the insurance period.

Notably, since the outbreak of COVID-19, the proportion of premiums allocated to overseas medical expenses has significantly increased, reflecting changes in demand for travel insurance. The share of overseas medical expenses in overseas travel insurance gross premiums rose from 45.7% in 2019 to 62.8% in 2022. Considering that there is little difference in rates before and after COVID-19, this change in proportion is interpreted as a shift in demand. In the international travel insurance market, incidents such as medical emergencies, quarantine costs, and travel interruption, cancellation, or delay?which were not previously considered important?are becoming increasingly common.

This can be interpreted as travelers wanting to easily receive medical services locally rather than merely being compensated for financial losses. Consumer demand is shifting from receiving insurance payouts after the fact to having insurance companies resolve issues proactively. Therefore, it is analyzed that domestic non-life insurers must actively respond to these consumer changes and discover new demands.

Kim Gyudong, a research fellow at the Korea Insurance Research Institute, explained, "In overseas travel insurance provided by domestic non-life insurers, there are services that guide travelers to local medical institutions or countermeasures via phone calls when medical services are needed, but there are no products that provide remote medical services directly. Although there are regulatory limitations for insurers to provide remote medical services directly, it is possible to partner with local medical institutions to offer face-to-face or non-face-to-face medical services locally."

On the first day of the extended holiday for Memorial Day on the 2nd, the domestic departure hall at Gimpo Airport in Seoul is bustling with travelers. Photo by Dongju Yoon doso7@

This content was produced with the assistance of AI translation services.