Traveling outside Europe, winter sports – it was almost impossible in the corona crisis. Only in the last few months are holidays slowly getting going again. Still, many people have continued to cover winter sports and long-distance travel in their travel insurance all this time. For example, they paid a considerable amount of unnecessary premium, while the non-life insurers had to pay out considerably less thanks to the corona crisis.
Take Katelijne Prinsenberg from Zaandam. She and her family continued to travel through the crisis and maintained their annual travel insurance policy. “In the summer we made trips and the children went away themselves. As of March 2020, we have traveled abroad a total of seven times. So it would have been more expensive to take out separate travel insurance for all of this and it would also have been a lot of arrangements,” she says.
Unnoticed, the coverage for winter sports holidays and travel outside Europe continued at the same time. Those two parts of the insurance both cost about 4 euros per month. Because the family stayed in Europe all this time and only got back on their skis last Christmas, they paid about 170 to 180 euros in premium for cover that was unnecessary.
13 percent adjusted opacity
This applies to more Dutch people. In a survey by the Consumers’ Association, only 13 percent of people with continuous travel insurance said they had adjusted their coverage during the corona period. In addition, only 6 percent terminated the continuous travel insurance because of corona.
This does not surprise economist Jaap Koelewijn. “People are not interested in insurance. It reminds them of things they don’t like. You would rather look for a winter sports holiday than look at your travel insurance. If you do nothing yourself, nothing will happen. The insurer may not unilaterally decide to remove parts of the cover. It could have happened that someone had to go to a funeral in Tokyo.”
It’s not just people who already had comprehensive travel insurance who paid for unnecessary coverage. At comparison site Independer, a third of customers opted for winter sports cover in December 2020, while last winter the slopes remained closed throughout Europe. Even more than half cut off global coverage. Unnecessary, says Bas Knopperts, the travel insurance expert at Independer. “You can always adjust your travel insurance by turning on world coverage. This can even be done shortly before departure. It’s a bit of a shame if you take such a cover and don’t use it.”
Tens of millions of extra profit
The corona crisis has not turned out badly for insurers. In 2020, Achmea made 82 million euros more profit on non-life insurance than a year earlier (2019: 178 million). According to the largest non-life insurer in the Netherlands, this was partly the result of fewer claims for traffic damage, burglary and fire. The number two, ASR, posted a positive ‘Covid effect’ of 21 million euros on an operating result of 226 million in 2020, and even 68 million euros in the first half of 2021.
Not many people know that you can turn world coverage and winter sports on and off
Had insurers seen that they can no longer make extra profits to prevent customers from holding on to unnecessary coverage? Client Katelijne Prinsenberg thinks so; according to her, not many people know that you can switch world coverage and winter sports on and off. “They could have pointed to that advantage. But once you are a customer, you quickly become a policy.
Actively inform the customer
Customer interests have been an important point of attention for insurers for years. In 2019, for example, the Dutch Association of Insurers and the Dutch Association of Authorized Insurance Companies (NVGA) drew up the Customer Interest Central Guideline. It states that intermediaries acting on behalf of insurers must take into account changes in the customer’s circumstances. They should point this out to customers if it is useful to take action.
According to economist Koelewijn, in practice this usually concerns situations in which the interests and amounts are large. An example is a couple who had an expensive term life insurance policy, when they could have taken out a comparable insurance policy for a much lower premium. Another example is an entrepreneur who has a commercial building built, which burns down after completion. An advisor must have pointed out in good time that the construction insurance must be replaced by a home insurance.
“It is of course not the case that you are duped for the rest of your life because of that premium for winter sports coverage,” says Koelewijn. Nevertheless, he can well imagine that someone is trying to get the premium paid back for this. “Then the insurer will of course say that with such a do-it-yourself insurance policy it is the customer’s responsibility. It is a questionable case.”
Koelewijn suspects that an email from insurers to customers about this would not have had much effect; people quickly think that this is advertising. “They click it away and go back to business as usual. I also regularly receive emails that I need to look at the value of my house. I click that away too.”
Since last summer, the sale of new travel insurance policies through Independer has been recovering. Knopperts even sees an increase of 10 to 15 percent compared to the period before the crisis. This is partly due to people who canceled their insurance and are now traveling again, but he also suspects an increase in risk awareness. “People seem to think that it is better to travel insured because something can always happen. We also see an increase in cancellation insurance. We received the most calls about this throughout the corona period.”