Travel insurance gap exists among one-third of Asian adventure seekers

Klook, a leading platform for experiences and travel services in Asia, recently revealed findings of new research conducted by Klook Protect, its travel-first insurance arm. Exploring consumer attitudes, behaviours, and lifestyles impacting travel insurance today, ‘Travel Troubles Beyond Lost Luggage 2024’ looks into the gaps and dynamic protection needs of Millennial and GenZ travellers who are often exposed to higher risk than previous generations of travellers. 

The white paper was commissioned by consumer insights agency, Canvas8, and was conducted among a sample of 2,500 respondents in February 2024 across 5 markets in Asia (Singapore, Malaysia, the Philippines, Hong Kong and South Korea).

Here are some key findings:

• Traditional travel insurance does not meet the needs of modern travellers today, discouraging 17% of respondents from purchasing it all together, making them compromise on their freedom and aspirations.
  
• 21% of respondents across Singapore, Hong Kong, the Philippines, Malaysia and South Korea want less traditional travel insurance.
  
• Millennials and GenZs have dynamic and diverse protection needs during their travels partly due to an increased appetite for local experiences and adventure, exposing them to more risk than travellers from older generations.
  
• New criteria for travel insurance have emerged, as 38% want their insurance to include more modern travel risks like climate disasters and travel scams, to coverage for what they leave behind on their holidays – from pets to their house. 

“Millennials and GenZs are looking for travel insurance that goes beyond protecting their general safety, they want to be fearless and experience the thrill. They’re tech-savvy and independent travellers that embrace unpredictable adventure and exploratory spirit. This is why there’s a gap in the market for different types of travel insurance that reflects their travel habits alongside elevating the quality of their holiday,” said Chuan Sheng (C.S.) Soong, Chief Executive Officer of Klook Protect.

The study points out that travelling in 2024 comes with a few added layers of risk compared to previous years. Among many factors, climate change, economic pressures and health concerns have all led to disrupted travel plans and potentially impacting safety in certain destinations. Examples include deadly flight turbulence, increased crime rates in high tourist areas, and health risks such as climate-sensitive infectious diseases.

Traditional travel insurance fails to keep up with the fast-evolving needs of modern travellers today

According to Klook Protect’s data, 21% of Millennials and GenZs expressed their desire for less traditional travel insurance because these products tend to follow a cookie-cutter approach that is now outdated. Specifically, 34.1% want the process of getting travel insurance to be enjoyable, followed by 12.7% and 8.1% who want a more progressive and transformational provider respectively. 

Based on research, difficulties in making claims (25%), understanding what is covered (22%), and having processes that are too complex (22%) or too long (20%) were key factors in discouraging modern travellers from purchasing travel insurance. 

Furthermore, the research highlights that 75% of travellers prefer to book aspects of their trips (flights, accommodation, insurance) all in one place, with 28% of those respondents ‘strongly agreeing’.

Malaysia (36%), Singapore (34%), and Hong Kong (21%) are the top markets with travellers highlighting difficulty in making claims. At the same time, the Philippines has a whopping 40% of travellers who are more value-conscious, ranking price as the top reason. 

Millennials and Gen Zs need different protection and preparation from unforeseen events as they are exposed to higher risk

Klook Protect’s survey revealed that 48% of travellers under the age of 35 are often drawn to adventure travel, and exposed to more risk during vacation due to solo or unplanned ventures. This includes activities like extreme sports, off-the-beaten-path destinations, and physically demanding experiences. Although exciting, these activities inherently carry a higher risk of injury or accidents, when compared to more traditional sightseeing. Furthermore, the disappointment of unwanted, unexpected moments or lack of achieving travel goals can ruin an entire trip. 

Up to 46% of those surveyed take a leisure trip at least once every 3 months, which could be anything from an overnight stay to a backpacking trip. This causes some to prioritise budget travel which could involve staying in less-regulated accommodations or transportation options with lower safety standards.

Besides travelling on a whim, Millennials and Gen Z heavily rely on technology for navigation, communication, and even booking activities. Dependence on phone battery life or limited internet access in remote locations could pose further challenges in emergencies. Other new risks such as ride-share scams, misrepresentation of accommodation on websites, and poor safety standards from adventure providers will increasingly drive demand for protection against them. 

Majority of travellers are unmotivated to buy travel insurance that’s currently available in the market, with some leaving purchasing decisions to the very last minute

Research data underscores that despite the culture of over-preparedness and meticulous planning in Asian households, travellers from Hong Kong, Malaysia, the Philippines, as well as Singapore who lead the way in frequent travel, wait less than a month prior to make decisions on travel insurance. It is also found that Singaporeans (30%), Hong Kongers (36%), Malaysians (37%) and Filipinos (36%) buy coverage just days to a week before their trips.

One-fifth expressed concerns over the complexity of making insurance claims, while 32% indicated a strong preference for seamless, easy-to-claim policies. These findings highlight a much bigger opportunity in the market.

Commenting on this, C.S. Soong analysed that, “There is a need for new travel insurance standards, as travellers are dragging their feet to purchase travel insurance, feeling overwhelmed by options and still not finding what they need.  Our research has made us aware that adventure seekers in particular, have had bad experiences with travel insurance in the past due to their claims falling out of the insurance coverage scope, or difficulties in finding suitable insurance in the first place. There is a gap in the market for travel insurance that can address such needs, and people deserve to have insurance that allows them to enjoy the adventures that they want without having to worry about the aftermath”.