Premium insurance demand rises with global travel disruptions

By Joanna Plucinska, Doyinsola Oladipo and Henry Gale

LONDON/NEW YORK (Reuters) -With flight cancellations, delays and other disruptions on the rise, leisure travellers are being increasingly discerning over the level and type of insurance they buy and businesses are turning to specialist advisory services to limit risk.

Since 2019, travel disruptions around the world have risen due to everything from COVID-19, extreme weather, volcanic eruptions, military conflict, jet safety issues, computer glitches and fires which have closed airports, grounded planes and stranded millions of passengers.

In the U.S., ongoing air traffic controller shortages and aging technology have caused significant disruption. In May, equipment outages, runway construction and staffing shortages caused flight cancellations, diversions and delays at Newark Liberty, one of the main airports serving New York City.

On Friday, Israel attacked Iran, forcing carriers to cancel or divert thousands of flights to avoid conflict in the Middle East.

Even with insurance, many policies specify a multitude of exemptions in the fine print.

As a result, more travellers are taking out higher-end insurance policies, often at higher premiums, to better protect themselves, according to interviews with nine travel executives, insurance companies and analysts.

“We’re in times that are quite unstable so people are cancelling more frequently than previously,” said Duncan Greenfield-Turk, CEO of Global Travel Moments, a luxury travel agency based in London.

European tourists have increased their purchases of travel insurance for this summer by 3% compared with last year, according to German insurer Allianz Partners.

Squaremouth, the largest travel insurance marketplace in the U.S., has seen a 34% year-over-year increase globally in purchases of “Cancel For Any Reason” protection.

British and U.S. holidaymakers in particular are more willing to pay a higher premium to protect their trip, said Anna Kofoed, the CEO of Travel for Allianz Partners.

About 32% more travellers globally requested an insurance quote from January to April compared to the same period in 2024, according to data from online travel insurance broker InsureMyTrip.

BUSINESSES SEEK TRAVEL ADVICE

There has also been a rise in demand for bespoke travel advice as U.S. President Donald Trump has announced a number of immigration-related restrictions including tighter visa vetting procedures and travel bans.

World Travel Protection (WTP), a global firm that advises businesses on travel risk, said it has seen a rise in U.S. residents being detained at U.S. borders and told their documents were no longer valid as visa rules were changing.