What is Travel Insurance?

(or, what is one to do after the hyena tears down your camp?)

What is Travel Insurance?

Travel Insurance, quite simply, protects potential losses relating to travel

Typical Coverages

Trip Cancellation Trip Interruption Travel Delay Medical Emergency medical

transportation Lost/Damaged Baggage Baggage Delay

Coverages (cont.)

Accidental Death and Dismemberment, including Flight Accident AD&D

Pre-Existing Conditions Waiver (purchase period option)

Collision Damage Waiver (optional)

Typically there will also be a service package included

General Structure

Travel Insurance is generally sold as a package of coverages - very seldom as a “pick and choose” set of coverages

Certain coverages tend to be sold separately: CDW, Flight AD&D

Ratemaking Considerations

Differing exposure bases on package:– Trip Cost (Trip Cancellation)– Trip Length (Medical)– Per Trip (Baggage Delay)

“Bundled” versus “Unbundled” Nonstandard set of policy exposure periods Catastrophe exposures (terrorism,

hurricane, financial default)

More Considerations

Potential Rating factors:– Trip Cost, Trip Length, Age, Destination,

State, Tour Operator/Cruise Lines penalties

Take-up rate (spread of risk) Unsophisticated seller

Strange but true...

Man attacked by wild coconut! Ripped off by a rat… Running with the donkeys Thanks for the rescue! Nothing’s going to ruin my vacation!