With the travel insurance market struggling, allegations of fraud by the Spanish Private Healthcare Alliance (ASPE) against UK insurers are the last thing the industry needs.
The claims relate to the access that consumers’ travel insurance affords them to private medical facilities in Spain, a crucial market for travel insurers. GlobalData’s 2018 General Insurance Consumer Survey suggests that some 13.1% of travel insurance policies were bought with the intention of travelling to Spain.
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Meanwhile, data from the Association of British Insurers shows that gross written premiums (GWP) in the UK travel insurance market declined by 10.8% in 2018. Given the country’s importance, it is therefore imperative that travel insurers do all they can to preserve this segment of the market, in order to prevent a further reduction in GWP and profitability.
ASPE, which represents more than 80% of Spain’s private hospitals, alleges that UK travel insurers may be committing fraud as many tourists in Spain are unaware that their insurance does not cover private healthcare facilities. This links to the emerging trend among travel insurers of offering policies that only cover public healthcare facilities via the European Health Insurance Card, in order to curtail medical claims cost inflation.
By not clearly communicating the exclusion of private healthcare facilities in their cover, insurers may be defrauding their customers. If proven to be true, these allegations could be costly to insurers with consumer confidence taking a hit – potentially reducing the uptake of future travel insurance policies.
Travel insurers already have a problem with trust among the public. The 2018–19 Financial Ombudsman Service (FOS) annual review stated that complaints against travel insurers increased by 13% from an already high level of 3,174. On top of this, over a third of complaints made to the FOS were upheld. This is symptomatic of an industry that has taken its customers for granted and is struggling to keep face.
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