ABI expects the payouts for cancellation could be the highest till date
ABI anticipates record payouts for travel cancellations. (Credit: Unsplash/Neil Martin.)
The Association of British Insurers (ABI) has announced that travel insurers to make record payouts in claims due to COVID-19, as per its first estimates.
A significant part of the payouts will be for cancellations and could easily exceed the cancellation payouts for all of last year, making it the highest cancellation payout on record.
The ABI anticipates that the £275m to be paid to customers in coronavirus related claims.
While the majority of payouts will be for cancellations, some payouts could also be for the disruption costs incurred overseas. The payouts could be twice as much for cancellation than for the whole of last year. To date, the highest annual figure of payouts for cancellation was £148m in 2010.
ABI anticipates 400,000 coronavirus-related travel claims this year
Nearly 400,000 coronavirus claims are expected, compared to the total cancellation and disruption claims of 294,000 received in 2010, the previously highest year on record for such claims, the ABI said.
Besides, the payouts for coronavirus could be well above the figure of £62m paid in cancellation and disruption claims that were made following the Icelandic volcanic ash cloud in 2010.
ABI Assistant Director, General Insurance Policy Head Mark Shepherd said: “At this unprecedented time, travel insurers are helping soften the financial blow for thousands of customers whose travel plans have been cancelled or disrupted by Coronavirus.
“Along with compensation from sources, such as airlines and credit card providers, travel insurers are helping customers get through these tough times.”
Earlier this month, the ABI member travel insurers offered enhanced help and support to all their customers who may are concerned about travelling overseas due to coronavirus outbreak.
The commitments offered by travel insurers included considering all valid claims for cancellation and travel disruption where compensation is not available elsewhere as quickly as possible.
It also included making available extra resources to offer prompt help and the most up-to-date advice to customers and publishing clear information at point-of-sale around the valid coverage for their policies.