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Blended business and leisure travel, increased geopolitical risks and other factors have many risk managers taking a look at their travel insurance policies.
Business travel is back.
In 2023, companies spent an estimated $1.03 trillion in business travel expenditures. Executives in both the U.S. and Europe believe business travel spending will recover to pre-pandemic levels by the end of 2024, according to a report from the Global Business Travel Association.
It’s not just business travelers jetting off to international meetings that are driving this increased spending. Other organizations, including nonprofits and universities with study abroad programs, are sending travelers on sponsored trips. Students, volunteers and business folk alike see these trips as an opportunity to explore other cities and countries after what, in some cases, amounted to years of staying home because of the evolving COVID-19 pandemic.
While folks may be eager to jump on a jet and start traveling, the organizations paying for these trips need to take a step back and consider the risks travelers might face. New post-COVID quarantine requirements, blended business and leisure travel, and rising geopolitical risks are just three issues organization leaders could run into when sending individuals on sponsored travel.
Accident and health insurance carriers are adjusting their policies to account for these new exposures and advising insureds on how to properly manage today’s travel risks.
A New Set of Business Travel Risks
The pandemic introduced a variety of new organizational travel risks. When COVID-19 sent people rushing home or struggling to find places to safely isolate while traveling, some countries added quarantine policies for travelers. Travelers needed to consider what to do in the event that they tested positive for COVID-19 while traveling.
Those concerns remain relevant today, and they’ve become more nuanced as new forms of professional travel continue to grow. Some travelers are now combining professional and personal travel. The practice has become so common that many cite the term “bleisure” — a combination of business and leisure — to describe the practice.
James Walloga, senior vice president, accident and health, Allied World
“Bleisure travel started to gain popularity pre-COVID. Now, it is even more popular,” said James Walloga, senior vice president of the accident and health division at Allied World.
“In general, employers are proponents of bleisure travel, because they often find their employees are far more refreshed and far more focused when they return. Surveys indicate that employees are willing to trade PTO days for the opportunity for blended or bleisure travel.”
Of course, the risks that business travel policies were originally designed to address are still present. One major reason organizations insure business travel is so their travelers will have insurance should they become injured or fall ill.
“If you’re injured in a foreign country and you go to the hospital, they’re not necessarily going to recognize your medical provider from the U.S.,” Walloga explained.
“Business travel accident insurance provides short-term out-of-country accident and sickness medical benefits, which help you gain access to a doctor or admittance to a hospital.”
Travel Insurance: The Basics
When people embark on organizational travel, they are trusting the business, school or nonprofit they’re traveling on behalf of to help them in the event of an emergency. Travel insurance policies play a key role in keeping them protected.
“A corporation or an organization that is sponsoring people to travel — or has people traveling on its behalf — has a responsibility to care for their wellbeing,” Walloga said.
Generally speaking, a basic travel insurance policy for organization-sponsored travel will cover emergency accident and sickness medical, accidental death and dismemberment, and travel assistance. In addition, it should cover evacuations, both medical and non-medical (such as natural disasters and geopolitical threats).
Many countries will require some of the basics of this coverage, Walloga explains: “Countries have different insurance requirements to gain access to that country. Oftentimes, medical coverage is a visa requirement.”
A more comprehensive travel insurance policy could include travel inconvenience benefits — trip interruption and delay coverages, or loss of baggage or personal effects coverage.
If an organization purchases insurance for its travelers, it wants to make sure the critical insurance information is readily accessible, whether through an insurance card or a mobile app.
“Some companies, for instance, will include contact information for the travel assistance provider on your travel itinerary, because the goal is to make sure that the traveler knows what to do in the event of an emergency,” Walloga said.
“There’s been a shift towards a travel app that you’ll have on your mobile device that will enable you to access intelligence reports, find a doctor or hospital, or request emergency services.”
Evolving to Meet the Needs of Today’s Travelers
Though the risks today’s travelers face are evolving, accident and health insurance carriers are prepared to adapt. They’ve stepped up in the past to refine coverage for political risks and other emerging exposures, making them well equipped to create policies for today’s business travelers.
“The industry has stepped up historically, in terms of war risk coverage, terrorism coverage or political evacuation coverage,” Walloga said.
Bleisure travel is one area where carriers are tailoring policies to meet the needs of a new type of traveler. Some insurers are developing policies with an option to extend coverage from the business portion of a trip to the leisure portion.
“We are developing a suite of benefits that is specifically targeted towards the bleisure traveling community, and I think you’ll see that more and more in the industry,” Walloga said.
Insurers are playing a more active risk management role when it comes to business travel as well. Many will help organizations that sponsor travel create risk mitigation plans to protect their travelers’ health and wellbeing. If a traveler is going to a country on the U.S. State Department’s travel advisory list, a carrier may recommend more detailed planning to ensure the worker is safe at all times.
“If a carrier knows that a traveler is going to a country on the U.S. State Department’s travel advisory list, they’re likely to recommend the client exercise care and conduct more due diligence than that required when traveling to other countries in determining what travel itineraries looks like,” Walloga said.
As organizations prepare for travel frequency to increase more in the coming years, working with an insurer that understands the risks and can adapt policies to new exposures is paramount. Many employers took time during the pandemic to reflect on their organizations’ travel policies, which has helped them be more prepared as business travel continues to evolve.
“Travel insurance program design is more important today than ever before, because you have a far more activated employee base that, frankly, is asking a lot more questions before they travel.” &
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