Reputation of travel insurers affected by flight operators
Unfortunately, if the airline cancels the flight, the majority of standard travel insurance policies cover only the specific limited reasons for cancellation, not the accommodations and associated costs.
According to the research, "travel insurance providers could seek to appease consumers by introducing new policies that not only cover airline collapse and flight cancellations, but that also protects related holiday expenses such as accommodation".
For example, the disruption of RYANAIR flights was set to be the biggest shock the airline industry would experience in 2017. At the same time, the announcement that MONARCH Airlines is to cease trading has superseded this, with over 750,000 bookings being cancelled.
Daniel PEARCE, a Financial Analyst at GlobalData, comments: "The fallout from RYANAIR's and MONARCH's woes will not help the industry improve its reputation, even though insurers may argue that their policies clearly state which events are covered".
"At the same time, insurers should explore methods to more effectively communicate and engage with consumers. If customers are fully informed about what is covered within their policy, then the travel insurance industry is less likely to suffer reputational damage when things go wrong".