The current status of the Grimsvotn volcano in Iceland, which is erupting the volcanic ash is a concern for the underwriters of travel insurance for the expected claims linked to this event, according to the financial market research firm Finaccord.
Finaccord Consultant Simon Tottman said across all respondents covered by the European survey, travel insurance claims resulting directly from the chaos caused by the Icelandic eruptions of April 2010 accounted for 5.4% of all reported claims.
According to survey report titled ‘Travel Metrics: Consumer Approaches to Travel Insurance and Assistance in Europe’, on travel insurance experience the claims relating to the volcanic ash cloud accounted for 44.6% of the total claims between 2009 and 2010.
The report, which was based on a survey of 6,000 consumers in France, Germany, Italy, the Netherlands, Spain and the UK, includes the widespread effects of last April’s volcanic ash cloud originating from Eyjafjallajokull in Iceland.
Finaccord said that the most common reasons for submitting a travel insurance claim were lost, stolen or damaged baggage or belongings, medical expenses and accidents incurred while traveling, which were not the core areas of claims activity specifically linked to volcanic ash.
"The fact that last year’s volcanic eruptions had a particularly strong effect on insurance claims related to trip delay and cancellation means that the current situation could once again represent particularly bad news for distributors and underwriters of basic or ‘value’ travel insurance policies, as these policies are often configured specifically to cover trip cancellation, either alone or in conjunction with a small number of other risks." Tottman said.