Top risks include extreme weather events, medical outbreaks, and socio-political volatility
SINGAPORE, 28 March 2017 – AIG Asia Pacific Insurance Pte. Ltd. (AIG Singapore) forecasts that high-impact incidents such as extreme weather events, medical outbreaks and socio-political volatility are the top emerging risks for local travellers over the next 12 months.
Claims data from AIG Singapore reveals that these high-impact incidents are becoming more common. Compared to three years ago, AIG Singapore has seen an 85 per cent increase in travel claims made for such incidents, with natural disasters being the costliest with an average claim amount of S$2,610.
AIG Singapore predicts that these trends will continue throughout 2017, resulting in a 10 per cent rise in demand for premium travel products offering a greater amount of cover.
AIG Singapore Vice-President and Head of Group Personal Insurance, Ignatius Chng, said, “As Singaporeans continue to be savvy and frequent travellers, their global mobility and increased awareness of travel insurance will see them taking a proactive approach and insuring themselves against unforeseen circumstances.
Natural disasters are on the rise with the onset of global warming, while we continue to see more rapid disease outbreaks, such as the Zika virus epidemic in 2016. Both have detrimental effects on travellers – from delayed flights and high medical expenses, to travellers finding themselves stranded thousands of miles away from home.”
Meanwhile, socio-political volatility is also an emerging risk. AIG Singapore notes travel insurance claims relating to socio-political volatility have more than doubled in the last three years, where people had their travel disrupted as a result of political instability, coup d'état, increased border security, and terrorist attacks.
Mr Chng said, “Singapore travellers are demanding greater levels of coverage and looking for travel insurance that suits their needs, especially since the global security environment has become increasingly volatile in recent years and high-impact incidents are more prevalent.”
In the case of these high-impact events that cause a lot of distress for travellers, Mr Chng said that it is important for insurers to adopt a seamless claims process supporting their customers wherever they are in the world.
“These situations can be highly stressful, and consumers are looking to mitigate risks in potentially bad situations. This is why they are no longer focused on the latest deals when it comes to travel insurance. Instead, their priority is what will provide the most comprehensive coverage along with a customer-centric approach, so as to have peace of mind when travelling.
For example, AIG has eight global assistance centres with medical professionals and insurance specialists ready to help 24/7. In these uncertain times, such services will become more important than ever.”
Mr Chng highlighted the example of the coup d'état in Burkina Faso in Africa in 2015, where AIG coordinated security specialists to keep track of their clients and their movements. They worked with teams on the ground to make alternative arrangements for policyholders in the face of flight cancellations, roadblocks and outbreaks of violence, successfully assisting 36 individuals to return home safely.
To meet this growing demand for a more seamless claims and risk management process, AIG Singapore expects travel insurance providers to transform their offerings by expanding their digital capabilities.
“We have seen an increase in customers making direct purchases digitally, but technology does not stop at distribution. The next step would be for them to embrace disruption and move more service offerings towards the digital,” Mr Chng said.