As a nation, British people love holidaying. The Office for National Statistics (ONS) records that, on average, UK residents take a whopping 64 million trips abroad and spend an average of £41 billion on holidays annually 1 . However, the economic backdrop in the UK and Europe is making holiday spending a challenge for many people. When budgets are tight, travel insurance might not be seen as a necessity. This article will explain the potential benefits of taking out an annual travel insurance policy via your employer’s sponsored benefits programme, as this policy may help to protect your holiday investments.
The impact of the COVID-19 pandemic, global inflation and geopolitical issues such as rising fuel costs and the war in Ukraine have all contributed to a significant increase in the cost of living. Combined with wage stagnation in many countries in the EU and the UK, the so-called ‘cost of living crisis’ has negatively impacted many people’s disposable incomes.
The cost of holidays has been similarly affected by global and local economies. According to ONS data, Britons spent £200 million more on holidays in the last quarter of 2022 than the same period in 2019, which they suggest could be due to the increased cost of living globally 2 . Similarly, the consumer champion Which? has identified an average price rise of nearly 20% for package holidays, and 51% for airfares 3 .
As a result, many people are making more considered choices when it comes to booking holidays, which you may be doing too. From taking fewer trips abroad, or travelling out of season, to using price comparison sites to secure the best deal, keeping the cost of holidays as low as possible is a key concern. Many people may find that the proportion of their disposable income spent on a trip is much higher now than previously, so the impact of that spend on their finances is significant.
But what if you need to cancel your trip? Without travel insurance, abruptly cancelling a holiday, perhaps because of illness or injury, could leave you considerably out of pocket. What you spent on flights, accommodation and car hire may not be recoverable, which might mean the loss of a few thousand pounds or more. In this economy, that doesn’t bear thinking about.
What you may not know is that with a multi trip travel insurance policy in place before booking, the holiday is covered if it needs to be cancelled at short notice for that unexpected reason 4 . You won’t lose the money you spent, which means you can rebook for a later date and enjoy the holiday you saved up for. Your employer may offer annual travel insurance as an employee benefit, making it quick and easy for you to take out a policy. Linsey Furber, Chubb’s Employee Benefits Business Lead for Accident and Health says: “Taking out an annual policy as part of an employee benefits programme gives people peace of mind, with cancellation cover in place whenever they might need it.”
It isn’t only flights and accommodation that have increased in price. It seems that mobile technology, gadgets and luxury items have also become more expensive due to inflation. If your mobile phone or designer sunglasses are stolen while on holiday, it will cost you more to buy replacements. With a travel insurance policy in place, you can raise a claim for stolen items to recover some of the cost. You can even do this from the comfort of your sun lounger by submitting the claim through the online Chubb Claims Portal.
Another industry that is being impacted by global inflation is healthcare. The cost of medical treatment is steadily rising around the world, with forecasted increases in 2023 of 6.5% in North America, over 8% in Europe and the UK, and up to 19% in Latin America 5 . If you have a medical emergency or require treatment while on holiday, this could cost you a great deal of money which you may not have. Even with a European or Global Health Insurance Card some types of care may require payment, such as private treatment or repatriation back to your home country, which could be very costly.
Fortunately, Chubb’s 24/7 travel insurance helpline can protect you from potentially costly medical bills. With our help, you can avoid paying for any medical care yourself as, in many cases, we can pay hospitals directly, thus protecting your finances. Linsey Furber says: “Our assistance line is a helping hand at the end of the phone. If you require medical attention while on holiday, we’re there to assist you and ensure you can return home. To help keep you safe, the Chubb Travel Smart app offers contact details for emergency services and alerts for any public safety risks at your destination.”
To summarise, as the rising cost of living across Europe and the UK puts pressure on people’s budgets and increases the price of holidays, personal items and medical treatment, travelling while uninsured means that you risk losing money. By taking out an annual travel insurance policy via your employer’s sponsored benefits programme, you are protected year-round for the trips you book and, if things don’t go according to plan, Chubb will be there to support you.
1 Five year averages from ONS travel data for 2017-2021
4 Full details of the exclusions, limitations and excess of the policy can be found in the policy wording.