Travel insurance slumps and might be grounded until 2024

By Tara McCabe ·

As a direct result of the Covid-19 pandemic, the Australian travel insurance industry has seen a sharp decline in growth, a new report from GlobalData finds. 

The data which was released last week, predicts about a 10% decline in the travel insurance industry in 2020 alone.

Not only is this a dramatic contrast to the almost 50% growth of last year, but it is unlikely that things will get back to pre-Covid levels until at least 2024.

Travel restrictions until 2021?

International travel restrictions are currently in place until mid-September. However, insurance analyst at GlobalData, Deblina Mitra says there is every chance that the restrictions will be extended.

“Despite the initial success in containing the Covid-19 outbreak, Australia is now experiencing a second wave. As a result, re-imposition travel restrictions are expected, which will impact the travel insurance industry,” says Mitra.

Long recovery for travel insurance industry

With the exception of flights to New Zealand, Qantas won’t be flying internationally until March 2021. According to GlobalData’s report, the Australian airline doesn’t expect domestic travel to recover even until 2022.

“The recovery of travel insurance is likely to be challenging and will depend on the success of containing the pandemic in Australia and the rest of the world. Even after the possible economic recovery from 2021, the growth of travel insurance is likely to be a subdued one,” says Mitra.

Less travel, more home time

So, with all this in mind, you probably won’t be travelling anywhere on a plane anytime soon. The money you won’t be spending on travel insurance could be put to good use. For example, you might want to think about making sure your home is covered.

Head to our home insurance guides hub for more information on what cover might suit you. Or, if you’re ready to dive in, check out the home insurance policies on offer below.

Compare home and contents insurance - last updated December 02, 2020

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Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.