Advice & Best Practice

Insurers must protect health services from the imminent travel boom

By Jenny Cohen Derfler, CEO and founder of AirDoctor

While much of the world settled into new lockdowns at the start of 2021 to combat highly contagious new strains of Covid-19, many dreamed of being able to travel. In fact, Skyscanner.com even reported a 48% week-on-week spike in searches for holidays after the positive vaccine news in September. Following the UK’s announcement to ease lockdown, the country’s biggest holiday firm, Tui, said bookings for foreign trips jumped 500% overnight.

Long-haul holidays – such as to the Mediterranean and the Maldives – have seen a particular surge according to CNTraveller, which also found that web traffic had surpassed pre-Covid levels. The future for the industry looks bright but, as Booking.com observes, caution will be at the forefront of travellers’ minds – a survey it conducted found 79% of travellers will be taking more precautions due to coronavirus.

Around the globe, most countries still have travel restrictions or compulsory quarantine rules for travellers. As vaccination efforts continue and the threat of Covid-19 decreases, those in the travel industry have a responsibility to ensure that their business models work in a way which keeps their customers, and global healthcare systems, protected.

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For travel insurers, offering comprehensive medical cover which reduces hospital exposure for those who have fallen ill will be key to growing customer confidence. For depleted health services around the world dealing with a decline in Covid-19 cases and the wider fallout of the pandemic, such as increased waiting lists for diagnosis and treatment of other diseases, preventing travellers from making unnecessary visits and stays in hospital will free up resources to deal with these pressing domestic health issues.

But are insurance providers innovating enough to be able to provide these solutions as quickly as the next few months, as travel picks up? The short answer is no. Many would agree that travel insurance is already the ‘problem child’ of the insurance industry. Its main challenge is that it has a large loss ratio – the amount insurers pay for claimants’ hospital stays and treatments, as well as the operational cost of running its claims division, mean that on average they only break even on customers who are with them for several years.

So, more innovative – and cost-effective – solutions to people falling ill abroad are needed in order to keep them away from overcrowded and depleted emergency care centres. But the solution, as some might assume, isn’t in partnering with telemedicine companies. In fact, using a telemedicine app abroad isn’t going to be very helpful as doctors from your home country cannot prescribe medication overseas.

The solution lies in offerings that dramatically reduce hospital exposure for customers who, upon falling ill, receive a much better – and faster – level of care from local doctors who speak their language without long and arduous stays in local ER departments. Naturally this also decreases the amount insurers will pay for claimants’ medical care and hospital stays, too.

In many countries, travel will begin to pick up around early summer, and it’s unlikely that insurance companies will have the time to create these sorts of platforms – and be able to sign networks of global doctors to provide medical care on them. However, nimble insurance technology companies exist, such as Air Doctor, which have been operating since before the pandemic hit and are poised to help big providers make this revenue stream profitable, their products and services more customer-centric, and their impact on the most strained parts of the global healthcare system, such as emergency care centres, minimal. 

Insurance companies must now win back old customers and entice the growing number of travellers looking for comprehensive health insurance abroad. The race is on, but which companies emerge as leaders in a sector ripe for disruption remains to be seen.


Jenny Cohen Derfler is CEO and founder of Air Doctor, the leading global app that connects travellers to local private doctors when they fall ill abroad. Air Doctor is active in 61 countries and just won the DIA (Digital Insurance Agenda) Diamond Award for Strategic Impact.

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