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Speech by Huw Evans at the ABI Travel Conference: Tuesday 9 October 2018

Good afternoon and allow me to add my welcome to Mark’s to this first ever ABI Travel Conference. We are particularly delighted to welcome the Minister of State at the Foreign & Commonwealth Office, Harriett Baldwin whom I will be introducing in a moment. And to be working with our sponsor TransferTravel.com whose business amply demonstrates how much the world of travel continues to change as the possibilities of the digital revolution reach further into the travel industry.

Travel insurance is a very important part of the UK’s world-leading insurance sector for two principal reasons.

The first reason is the cover it provides is vital for the millions of Britons who travel abroad every year - for both pleasure and work. The ONS tells us there were 72.8m visits overseas in 2017, 46.6m visits for holidays. The pattern of this travel is changing too with City breaks overtaking beach holidays as the most popular choices and music festivals and coach holidays increasing in relatively popularity. For the minority of those travellers who require medical treatment while away from home, often in a country where they do not speak the language, insurance provides a vital safety net at a very distressing time. Last year, ABI members paid out £201m in medical expenses; over half of the £385million claims paid. With over 500,000 claims made, this is a reminder of how our sector is effectively a partner with the government in protecting the interests of our citizens overseas.

The second reason is travel insurance is so important is that it is often someone’s first experience of buying insurance and claiming on it. This is more true now than it was 20 years ago when people bought cars and homes at a younger age and when there were 17m fewer visits abroad each year than there are now. Whether it is peace of mind on medical costs, cancellations or theft or claiming for an incident, our customers’ experience of travel insurance is often the first and strongest impression of our industry that can shape their view of us for many years to come. We have seen in recent years with terror attacks, airline collapses and volcanic ash the range of unexpected events that travel insurers have dealt with; last year the number of claims increased by 30,000 largely as a result of a major airline insolvency.

So this is a product that is vital for the way we live our lives and plays a major part in the reputation of the insurance industry. But conferences like this are not about us patting ourselves on the back. Instead, we have the opportunity to take stock and to consider how we need to continue to evolve to meet the challenges of a fast-changing world.

With that in mind, I would like to outline briefly four particular challenges that I think we face.

The first is awareness of the importance of choosing the right product. Put bluntly with travel insurance, you usually get what you pay for. It is not a commoditised product with the same cover whether you pay £20 or £200. Both policies can be a good choice for a customer but they will not offer the same level of protection against the same range of scenarios. As an industry we need to continue to harness digital technology to explain these choices to customers better; what is included and what is excluded. That’s why the ABI has just extended our successful ‘Insurance Experiments’ consumer education campaign to travel insurance, launching three new digital animations to engage customers via social media in amusing cartoon formats as well as updating our own customer facing webpages.  It is also why the FCO’s TravelAware campaign is so important and I’m pleased that in addition to the minister, we are joined today by the FCO’s Consular Affairs director, Julia Longbottom to deepen our partnership.

The second challenge is about the importance of Health cover. If I had an Aladdin’s lamp and five wishes for things I could change about the insurance industry, one of those wishes would be to rename travel insurance to make it more explicit that the main area it covers customers for are health expenses. This is so often misunderstood by customers who, in turn, fail to appreciate how important it is to fully disclose health information when taking out the policy.

This brings me to the third challenge - for us. When customers disclose fairly and honestly their existing or historic health conditions, we have to continue to find ways to offer them affordable insurance whenever possible. There will always be individual cases where sadly the risk posed makes it impossible to provide affordable cover but we know as an industry we can do more to build systems that can examine cases individually based on more sophisticated underwriting of risk. We can also do better in offering insurance options that may not be everything the customer wanted but are at least better than a blanket ‘no’. And - as the FCA points out - we must work even harder at signposting so we help customers find an insurer or broker who will help them even if their first choice of firm cannot.

The final challenge is out of our hands for now - Brexit. But from our detailed work with Department of Health, DexEU and other government departments, we know that the future of the EHIC and wider travel arrangements are very much near the top of the list for resolution in any Withdrawal Agreement. While travel policies can ultimately be adapted according to any outcome, I know the Government well understands that the industry needs time and a transitional period to ensure that customers do not experience disruption.

If we can meet these challenges, I am confident this market can continue to grow, offering vital protection to the majority of our fellow citizens who travel abroad every year. Holidays are some of the most precious moments in our lives but travel can also be unpredictable and stressful, especially if things go wrong. Our sector has a vital role in providing peace of mind to our fellow citizens for the moments in their lives that feel particularly special to them. Let’s meet that challenge fully for a successful future.

Last updated 09/10/2018