From Travel Advisor to Risk Manager: Navigating Travel Insurance: Travel Weekly

Travel insurance has changed over the past decade, and with it, the role of the travel advisor has evolved. The health and well-being of customers have always been top-of-mind but doing it well in the current travel climate and being appropriately compensated involves more than giving travelers a do’s and don’ts checklist and a telephone number to call. It requires increasing the responsibilities of the advisor to include risk management, which requires being nimble in responding to potential threats, knowledgeable about insurance products and savvy by positioning insurance as risk management rather than an upsell.

Although travel is booming, the risk is ever-present. Globally, 78% of business travelers (nearly 8 in 10) experienced travel disruptions in 2024, including 140,000 flight cancellations in the U.S. The cost of travel has steadily increased over the past four years (up 32% from 2022), and global economic uncertainty, natural disasters and disease outbreaks were among the reasons “the Cancel for Any Reason Travel Insurance Market was valued at USD 27.3 billion in 2023 and is projected to reach USD 95.5 billion by 2031.” The bottom line? The opportunity for travel advisors to fill a critical need and grow their business is bigger than ever.

Follow the progress insurance providers have made

The timing is right for travel advisors to consider insurance as a risk mitigation tool. For many reasons, including increasing costs, evolving customer needs, technological advances, pandemic preparedness and demographics (seniors require policies with higher medical limits, and younger travelers are more concerned with safety and logistics), insurance companies have become more innovative with their offerings.

Travel insurance has changed significantly, says Gary Portuesi, co-managing partner at New York-based Authentic Explorations. The company specializes in travel to Italy, where it is also a destination management company, and offers programs in nine other European countries plus Iceland. “The COVID-19 pandemic changed the insurance landscape. Now, insurance companies seem more willing to cover a wider range of scenarios,” he said.

Some of the options Portuesi refers to include more types of policies, different price points and levels of coverage and fewer exclusions, all of which make it easier for clients to find the coverage that suits their needs. “Say it’s a $40,000 trip, and you only want to insure $20,000 of it. That’s an option now. In the past, it was like, oh, preexisting conditions? No, this doesn’t count. That doesn’t count. Your sick parent doesn’t count. That’s all changed,” he explained.

Learn about new and niche products

The diverse array of products allows travel advisors to partner with insurance providers to craft tailored solutions that meet clients’ unique needs. For example:

Trip cancellation and interruption insurance reimburses non-refundable expenses if the traveler must cancel due to covered reasons, such as illness, severe weather or an unanticipated emergency. Some plans also protect against supplier insolvency.

Emergency medical and evacuation coverage provides primary medical coverage, often eliminating deductibles for emergency care and evacuation. Some policies include telemedicine services, identity theft resolution and evacuation for political unrest and natural disasters.

Cancel for Any Reason (CFAR) and Interruption for Any Reason (IFAR) are riders that provide reimbursement for reasons outside standard policy parameters, such as personal hesitation, work obligations or the threat or fear of a pandemic.

Baggage and travel delay protection covers essential purchases like clothes and toiletries travelers need while waiting for their luggage to arrive and compensates customers for hotel stays or meals when trips are disrupted.

Vacation rental damage protection replaces traditional security deposits for damage claims from the rental property manager. 

Corporate and group policies cover risks, such as conference cancellations and work-related injuries that business travelers, educational institution employees or religious group members sustain abroad.

Multi-trip plans cover multiple trips within a year and often bundle medical coverage, trip interruption and baggage protection.

Mental health coverage reimburses therapy sessions when travel disruptions and stress-related illnesses induce anxiety.

Niche plans cover a range of offerings, including injuries sustained during high-altitude treks and scuba diving, technology failure and ergonomic injuries (for digital nomads) and art and jewelry protection.

Carbon-neutral policies offset trip-related emissions, donate a percentage of premiums to reforestation projects and cover eco-tour cancellations due to environmental degradation.

Settle on selling versus recommending insurance

Advisors can offer insurance to their clients in multiple ways. Collette, a guided tour operator headquartered in Rhode Island, provides customers with a white-labeled travel protection plan that it bundles into the tour price. Their Cancel for Any Reason policy offers customers a full refund prior to departure and coverage for delays, flight cancellations, schedule changes and medical issues while traveling. White labeling allows brands to maintain brand consistency while protecting customers. It can also streamline claims resolution.

Another option for travel advisors is to counsel clients on the types of insurance they may need based on their specific needs and travel profile but refer them to an insurance provider or an insurance marketplace for pricing and coverage details. Recommending instead of reselling insurance helps advisors reduce the liability of offering insurance while keeping the coveted relationship with the client intact.

Think beyond insurance

Risk mitigation isn’t only about travel insurance. Collette’s Executive Vice President and Chief Revenue Officer, Jeff Roy, describes several strategies (besides insurance) the firm uses to manage risk:

• Adjusting itineraries based on local conditions: when issues in certain regions arise, like earthquakes in Santorini, Collette communicates with travelers and makes substitutions or changes to ensure their safety and comfort.
• Leveraging local infrastructure and partnerships: Collette has employees, vendors and partners in the destinations in which it operates to gather intelligence and assess a location’s safety before deciding to run a tour.
• Maintaining a crisis management team: Collette has a dedicated 24/7 emergency services team that quickly responds to unexpected situations. 

Collette’s Rhode Island team evacuated several tour groups from Israel to Jordan in October 2023 and returned them home within days of the terrorist attack. “It was a pretty complex thing to do because Israeli guides can’t go over the border into Jordan. You have to do a handoff to Jordanian guides who take the groups the rest of the way. We had travelers who managed their air travel, and we booked flights home for them at no charge. We just took care of everybody,” Roy says.

Prepare for customer conversations

Travel insurance, while critical, is less glamorous than choosing a destination or a seat in first class. To make discussions efficient, educational and ethical, advisors can take some additional steps:

• Asking clients to complete a pre-trip questionnaire covering health conditions, special needs and risk tolerances can help advisors match policies and coverage with customer requirements.
• Obtaining training and certifications from insurance providers enables deeper and more effective conversations with clients. 
• Carefully vetting travel insurance providers, such as verifying track records, checking ratings, getting recommendations and reviewing premiums, can give advisors more confidence.
• Highlighting the gaps in credit card coverage, including limited medical coverage, trip cancellation reimbursement limits, preexisting conditions exclusions, lack of CFAR options and complex claim processes, helps advisors dispel some common myths.

While selling travel insurance products can be lucrative for travel advisors (commissions range from 15 to 40 percent of premiums), it’s a means to an end for most. The goal is to design creative, comfortable, safe and secure experiences by managing risk and delivering on expectations.