On November 14, 2024, The Canadian Association of Financial Institutions in Insurance (CAFII) held its sixth webinar of 2024 – A Conversation on Travel and Travel Insurance: A CAFII Virtual Fireside Chat with Andrea Stuska, Annelaure Masson, and Sheila Burns. CAFII’s Executive Director, Keith Martin, moderated the webinar. Three travel insurance experts joined him to discuss the state of travel insurance in Canada. They were
- Andrea Stuska (Senior Manager of Environmental, Government, and Industry Relations in Life and Health, TD Insurance);
- Annelaure Masson (Compliance Manager and Privacy Officer, TuGo); and,
- Sheila Burns (Director of Health and Disability Policy, Canadian Life and Health Insurance Association (CLHIA)).
Many representatives from CAFII’s 15 member companies and 9 Associates attended the webinar, as did representatives from allied industry associations such as the Canadian Life and Health Insurance Association, or CLHIA; the Travel and Health Insurance Association, or THIA; the Registered Insurance Brokers of Ontario (RIBO); and the Conference Board of Canada. Many insurance and financial services regulators and policy-making authorities attended as well, including the following government organizations:
- The Insurance Council of British Columbia;
- The Government of Alberta;
- The Alberta Insurance Council;
- Québec’s Authorité des marchés financiers, or the AMF;
- The Financial Services Regulatory of Ontario, FSRA;
- The Financial and Consumer Services Commission of New Brunswick, or FCNB; and,
- The OmbudService for Life & Health Insurance, OLHI.
After K. Martin introduced the panellists, he asked them if Canadians are travelling more, less, or the same relative to recent years. Sheila Burns answered that, from the insurance side, it seems that Canadians are getting back to pre-pandemic levels of travel. 2023 was a high travel year thanks to what was dubbed “revenge travel,” or travel specifically to make up for lost time because of the pandemic. There are a few locations that have not seen an increase in interest from Canadians, specifically parts of Asia and Russia. This has been largely attributed to geopolitical concerns. Annelaure Masson jumped in, agreeing with S. Burns’ statement. She added that she doesn’t feel Canadians are travelling more per se. Rather, what is happening is a shift in how Canadians travel, including changing destinations. This is, yes, due to geopolitics, but also because the Canadian dollar has been low. Andrea Stuska agreed with both S. Burns and A. Masson, commenting that while it may seem like Canadians are travelling more, in actuality, Canada is simply returning to pre-pandemic levels. Therefore, despite the inflationary pressures seen in the last few years, Canadians are still planning to travel; however, this travel may now look different. Duration, location, and/or the reason for travel are all shifting; where once Canadians may have been travelling for exploration, now they may be travelling for leisure. A trip that may have been two weeks pre-pandemic may now be 10 days.
K. Martin polled the audience to determine if they were planning on travelling more in the coming 12 months compared to the last 12 months. The majority (56%) said they would be travelling less in the next year compared to the last. A. Masson commented that this may be due to inflation, which remains an issue for Canadians, but it also may be because of geopolitical issues around the world. She still expressed her surprise at the poll results, expecting a higher number for travel. A. Stuska agreed, commenting that she was surprised as well. She acknowledged that many are likely cost-conscious; however, she still firmly believes that a lot of Canadians are reducing discretionary spending in order to save for travel. She does think geopolitical events are likely to influence people’s desire to travel.
K. Martin then asked S. Burns how Canadians compare to other countries in terms of travel frequency. Canada is a cold country, which has caused many to depart during the winter months. Does this result in Canadians being more frequent travellers than most? She replied that, though she isn’t sure, she thinks so because Canadians travel during both the summer and winter months, whereas other countries may just travel during summer. Canada does have the “snowbird” effect, which sees many Canadians fleeing the cold climate for warmer weather. But Canadians also travel in the summer because that is typically vacation time. Furthermore, Canadians are likely the biggest group travelling to the U.S. because of its proximity to Canada. With the recent US election, however, this may change. A. Stuska disagreed, commenting that most Canadians get an average of 10 vacation days per year. In contrast to European countries, Australia, New Zealand, and the UK, Canadians get shorter vacation time. In fact, some European countries close for all of August, thereby allowing more time for travel. Thus, comparing Canada to other countries, she argues that Canadians travel less. A. Masson added that it is hard to compare and quantify Canadians to Europeans due to Europe’s geographical proximity and their travel infrastructure, like the train systems.
Since the pandemic, travel and travel insurance have changed. Awareness of health risks has increased. K. Martin asked how the market has shifted post-COVID-19. A. Masson agreed that there is more consumer awareness around travel insurance on both the medical and financial side. Baggage insurance became very popular post-pandemic. Consumers have also become a bit more inquisitive and demanding. Canadians are looking to protect their investment, in this case, their trip, and will say as much. However, travel insurance is still seen as a luxury for many. A. Stuska agreed with A. Masson, adding that she’d like to see more Canadians utilizing different types of travel insurance coverages. This has not always been the case. Lately, more claims have been made under embedded benefit coverages from travellers’ credit cards. Something important to consider is unforeseen circumstances, which are rarely, if ever, included in people’s travel budgets. S. Burns explained that as certain topics gain prominence in industry, misinformation tends to follow. For example, lately, the media has questioned why trip cancellation is necessary if the flight in Canada already covers it. She explained that many other things are involved in trip cancellation insurance other than a flight. The lack of information or the spread of misinformation can really hurt travellers looking to protect themselves.
Continuing that line of thinking, K. Martin inquired how insurance packages are changing, how the travel insurance sector is evolving, and what insurers are doing to answer consumers’ shifting demands. S. Burns replied that a few things come to mind. Group products, for example, which were typically medical products, have begun to offer other forms of coverage and insurance options. In terms of the changing travel insurance sector, she explained how collaborative the industry became during and post-COVID. Insurers came together in response to consumer questions and concerns, and suggestions from the Canadian Council of Insurance Regulators (CCIR), all in an effort to make travel insurance digestible and comprehensible. K. Martin remarked that he has seen progress in this area post-pandemic since the CCIR emphasized consistency in terminology across vendors. S. Burns agreed, noting the uniformity in the description of pre-existing conditions and stability clauses. A. Stuska added that there isn’t a one-size-fits-all approach; with travel trends changing, competitors respond with new offers. New products enter the market because of evolving consumer demands. She agreed with S. Burns about the need for better consumer education. Therefore, insurers should continue talking about their products. There are a lot of different types of coverage offered to consumers, but knowledge and foresight may be the barrier to access. While A. Masson agreed with both panellists, she did comment that travel insurance products may not be fundamentally changing but are instead being tweaked to better respond to consumer demands.
Diving deeper into the topic of uninsured, thus unprotected, travellers, K. Martin asked how insurers can reach Canadians planning on travelling without insurance without engaging in scaremongering. A. Masson commented that consumers are more aware of travel insurance and what it can do for them. However, they are also often misled about what it can do for them. Thus, many who do buy travel insurance are under the impression that it can do more for them than is the case, thereby causing disappointment and frustration at the time a claim is made. Many of these people then go to social media and complain. This issue is on the industry; insurers need to ensure consumers understand what they are buying and the limitations of these products. A. Stuska agreed, remarking on the need for balanced educational initiatives. She added that often many travellers assume they won’t need travel insurance because they have an “it-won’t-happen-to-me” mindset. Insurers can do more to combat this, like using accessible language or engaging in specific partnerships. She mentioned Global Affairs Canada, which puts out travel advisories. There is always room for improvement. Social media is one such area in which insurers could better access and educate Canadians consumers.
K. Martin remarked that, during COVID, some countries did not let people travel there unless they could prove they had a travel insurance policy. Therefore, government could play some role in reminding people of the risks of uninsured travel. S. Burns said that this is an option for Canada. While no one wants to engage in fearmongering, people still need to know the risks. Risks aside, Canadians need to be aware of the financial burden an uninsured injury could cost them if they, for example, travelled to the U.S. and hurt themselves. While the “snowbirds,” or the older generations, do know about travel insurance and buy it, younger generations seem to often forgo this expense. S. Burns explained that it is the younger generations that insurers need to appeal to, and one way to do this is through social media and online platforms.
One major challenge for the travel insurance industry is the lack of hospital beds available during repatriation. S. Burns explained that awareness of this issue seems to grow every year because new stories are circulated across media platforms. This has been such a challenge that, over the summer, the Ministry of Health in Ontario reached out to the CLHIA for help. Ministry representatives met with the members of CLHIA’s travel insurance committee to hear some key points, including some identified “glitches” in Ontario’s repatriation process. CLHIA’s members put together a document describing the whole process, including the “glitches” and recommendations on how to fix these.
How insurers work with hospitals is different across Canada; some provinces and hospitals have better systems than others. Part of the issue is that, even if a Canadian is safe and being cared for in a bed abroad, they may want to be repatriated. This could be for a myriad of reasons, from preference to personal responsibilities. Repatriation not only impacts insurers and the healthcare system, but it often involves a degree of support from family members and/or friends. A. Stuska agreed with S. Burns, adding that understanding the healthcare system is already frustrating and complicated for many Canadians, so it’s likely the last thing they want to think about in advance of a trip. Unfortunately, though, space cannot be made where there isn’t any, meaning that if a Canadian is injured abroad, repatriation may take them outside their home province or city. This is a reality that Canadians need to consider when travelling, even if it is complicated. She encouraged people to research all destination areas before travelling. This won’t solve the problem, but it can help keep Canadians informed. A. Masson remarked that many travellers are unaware of the reality of injuries. They do not necessarily understand the impact of foreign hospitalization and repatriation because they assume their insurer will fly them home and put them in a bed in their local hospital. This is not always the case. Canadians need to understand that this process takes time. She stressed the importance of familiarizing yourself with your policies and learning what needs to be done in case of emergency, like who needs to be contacted and when. This is to safeguard against time delays and complications in the event of an emergency. This is actually a part of THiA’s Bill of Rights – know your health, know your rights, and know your policies. This means you do have rights, but you also have a responsibility to be informed.
K. Martin polled the audience and found that a strong majority are planning on travelling internationally in the next few months. Building on this, with the rise of thematic or experience-oriented travel, he asked the panellists what policies they offer and if they have been required to modify or build custom policies in response. A. Masson remarked that certain types of travel have grown with different demographics. The younger generations tend to prioritize budget or adventure travel. The industry has responded in turn by gearing its policies towards these, arguably, higher-risk activities. Experiential travel is another growing theme, as is ecotourism. For all these trends, the market responds with new offerings. That being said, some travel remains popular with certain age groups, like cruising for the older generations. Products are not the only thing changing to fit the market; benefits and services are evolving. S. Burns agreed and emphasized the need to know your policy and its benefits. A. Stuska added that there had been a lot of delays with natural disasters like hurricanes. People do not think about insurance in relation to this, but she encouraged Canadians to consider purchasing coverage that is appropriate to their destination and travel duration.
K. Martin gave the panellists a scenario on the coordination of benefits: a Canadian is travelling outside of Canada. They have embedded credit card insurance in the card that booked the travel, employee benefit travel insurance through work, and a purchased stand-alone coverage. How does this Canadian coordinate the numerous coverage and benefit plans in the event of an injury? A. Stuska explained that when someone has multiple benefit plans, these plans work together to pay the claim, provided that the consumer is actually claiming all the coverages. There are scenarios to determine which policy goes first, but usually, this is determined by looking at the claim itself to see what is being requested. There is no reimbursement under all the plans that would cover more than 100% of the claim. A. Masson added that the CLHIA has guidelines for the coordination of benefits, which most insurance providers follow, that identify which is the primary policy, the excess policy, and the sequence of who pays what. What is complicated is there isn’t a universal process; each provider has its own process. THiA has a claims committee that is looking at this issue to try and determine how the process can be improved for both consumers and insurers.
With the recent American election, it now looks like the Canadian-American border will be less open, and there could also be significant refugee pressures. Some American officials are under the impression that terrorists are entering their country through the Canadian border, which is factually incorrect. K. Martin asked the panellists how this would potentially impact travel and travel insurance and if these greater risks could result in different packages and premiums. A. Stuska commented that she thinks the anticipated measures across the border are worrisome. She gave the example of the measures in place during the pandemic. She explained how they became problematic because of the additional work they required. This could become the case for travel insurance and the border post-election. There may not be immediate changes to travel insurance coverage because those packages offered across the industry are fairly comprehensive. Instead, Canadians should prepare for an increase in delays and trip cancellations. A. Stuska encouraged Canadians to keep up with destination advisories and stay informed. A. Masson said that, though she doesn’t foresee any substantial changes to travel insurance, there is a lot of uncertainty about what could happen. Certain policies will be put in place, which may have a trick-down effect on travel and, possibly, travel insurance. If the Canadian dollar continues to drop, travel to the U.S. may dwindle. The U.S. is the travel destination for Canadians, so seeing how this may change will be interesting.
Canada has a growing aging population. As people age and accrue more money and time, they ironically become less eligible for travel insurance, regardless of health. K. Martin asked the panellists to comment on this reality and whether industry will begin to do more to cover those folks. A. Masson explained that the reality is that while those aging Canadians do have coverage, elderly travellers have higher premiums because they are at a higher risk of ailment, injury, or health issues. It is the sad reality. There has been an increase in product options, like products that cover pre-existing conditions. However, aging Canadians still need to do the research to understand what they are buying and how they are covered. A. Stuska agreed with A. Masson, adding that, regardless of age, insurance is a pooled rating. This means some folks will be healthier than others. It is wonderful that aging Canadians are trying to travel more; they just need to budget for the right coverage.
K. Martin thanked the panelists and concluded the webinar.