International travel from the UK is set to resume on May 17, but most major travel destinations have been left off the list of countries that do not require travellers to self-isolate upon their return. Staycation will see a boom in the UK as COVID-19 restrictions are relaxed nationally, but insurers will need to highlight the benefits of domestic cover to increase uptake of such products.
Many individuals feel there is less of a need to buy travel insurance for a domestic holiday. According to GlobalData’s 2020 UK Insurance Consumer Survey, 63.4% of individuals who purchased a travel insurance policy in the past 12 months did so to cover a trip abroad, while only 26.5% of these respondents would consider purchasing travel insurance for a UK trip. With homegrown holidays set to increase in popularity, travel insurers will need to target domestic holidaymakers more effectively.
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Travel restrictions have been in place since the start of the COVID-19 pandemic, severely impacting travel insurance sales. While the ban on non-essential travel is set to be lifted in May 2021, just 12 international destinations feature on the so-called “green list” – not requiring travellers to quarantine upon their return to the UK. Of these 12, only Portugal is a holiday hotspot among British nationals. Yet in order to travel to a green list country, individuals must take a PCR test before and after their trip, making international travel costs prohibitive for some or too high to justify for short stays. In addition, some of the countries on the green list have imposed their own restrictions; for instance, Australia only allows its own nationals to fly into the country.
Continued restrictions on international travel will naturally increase the appeal of staycations, particularly at a time when COVID-19 cases are low domestically. In addition, many will be reluctant to travel abroad over fears of contracting the virus in a foreign country, while others will be deterred by providers’ exclusions for flight cancellations related to COVID-19.
Domestic travel insurance can provide cover for a range of unforeseen issues, including disruption to travel plans such as train and flight cancellations, having to cut a trip short due to an emergency, and loss or theft of luggage or other property. Many holidaygoers will be unfamiliar with the benefits of purchasing a travel policy to travel within the UK, and insurers will need to build awareness to capitalise on the opportunity. Given that the global pandemic will likely keep airline passenger volumes low for the foreseeable future, travel insurers must put greater efforts into the domestic holiday market. That way staycation in the UK can flourish.
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