Travel insurance for high-risk regions – risk identification and mitigation

Maintaining accurate policy wording
Amid ever-changing geopolitical landscapes, policymakers are challenged to identify risks across a variety of environments worldwide, and keep policies up to date.

Adam Underhill, Marketing Director at Voyager Insurance, commented: “Updating the High Risk Voyager is simple for us as we have a common wording which applies to all countries.” He said it would be impractical for Voyager to use country-specific policy wording, though, given the pace of change in certain countries, warning that there would be a risk of policy quickly falling out of date.

According to Underhill, writing on “an endorsement basis” provides a company with more flexibility. He explained: “As many of our High Risk Voyager policies are purchased online, it is relatively easy for us to exclude a country from our online platform and ask people to call us so we can apply the endorsement. This gives us the opportunity to ensure the policy is going to provide suitable cover for the person.”

Dean expanded on this by highlighting the difficulty for traditional insurers of getting policy changes made quickly or even of issuing policies for an urgent trip. “It’s one of the key problems we were trying to resolve, which is why Hotspot Cover was born,” he said.

A real-life example is Israel, following the attack by Hamas on 7
October 2023. Dean said: “This came as a surprise to most of the world, but insurers in particular struggled to meet this as a country changed from relatively benign (from a political risk perspective) to one deemed to be high conflict or even a war zone.

“For Hotspot Cover, who are a response-led specialist insurer
covering many of the world’s conflict zones (including Ukraine), our ability to bring local resources and manpower to respond and assist meant that insureds could be looked after.”

Hotspot has covered Israel and Palestine since the start of the conflict, including cover in Gaza on a bespoke underwritten scheme and security-assessed basis. Dean noted the impact of Global Guardian in helping the company to achieve this: “They have boots on the ground (in-country), resources in Israel, and in 135 countries across the world,” he said.

Countries with limited healthcare infrastructure or high rates of infectious diseases may be deemed riskier

Underwriter support in high-risk regions
Earlier this year, Allianz warned that traditional underwriting of
physical risks does not meet the reality of evolving extreme climate impacts or intangible cyber threats.

Furthermore, a recent study by Bloomberg Intelligence (BI) showed a high number of insurers are exiting high-risk areas due to a rise in climate-related losses.

BI’s research shows losses have rocketed by 360% in the past 30 years, due to the increasing frequency and intensity of natural disasters.

Further to this, global insured losses from natural disasters in 2023 were estimated at US$118 billion (£92 billion), above the 2017–21 average of $97 billion (£76 billion).

BI claims that this has resulted in insurers raising premiums and exiting areas they feel are “uninsurable”. We asked, in a time of increasing climate-related losses and political instability, is there still sufficient support from underwriters to write insurance for high-risk regions?

Dean observed: “While there is a limited number of specialist underwriters and reinsurers who understand and have appetite for high-risk regions, there is still enough capacity in the market.”

Underhill added: “We are fortunate that our underwriters are extremely flexible and willing to write the business for high-risk regions. We have a great working relationship with them, and they are always willing to listen to our approach to dealing with
a specific situation.”

Amid ever-changing geopolitical landscapes, policymakers are challenged to identify risks across a variety of environments worldwide

Medical assistance in high-risk regions
Offering medical assistance in high-risk regions requires detailed planning, coordination, and strict adherence to safety protocols.

Natalya Butakova, CEO of AP Companies, outlined the following steps her company takes:
• Risk assessment and evacuation plans: this process involves the development of appropriate medical response strategies.
Preparation of robust evacuation plans and procedures helps
facilitate swift evacuation of members during critical medical
situations to safer locations with superior medical facilities
• Telemedicine: making use of telemedicine consultations to enable medical professionals to provide remote assistance. This approach minimises the need for patients to venture outside safe areas and visit medical facilities
• Collaboration with local authorities: establishing partnerships and collaboration with local medical authorities and organisations to enhance access to medical resources and expertise in high-risk regions. When working with insurance companies that have members in high-risk areas, it is important to engage directly with local authorities and embassies to stay informed about any changes or developments.

Butakova said these solutions can enable a company to effectively provide medical assistance in high-risk regions while prioritising the safety and wellbeing of insured members. Nonetheless, providing medical assistance in high-risk regions presents unique challenges when faced with limited healthcare infrastructure, political instability, security concerns, and logistical difficulties.

Traditional underwriting of physical risks does not meet the reality of evolving extreme climate impacts or intangible cyber threats

Dean outlined several solutions that might help address
these challenges:

• Remote medical consultations: trained medical experts on call 24/7 to enable remote consultations, diagnoses, and treatment
recommendations to individuals in high-risk regions. This allows
travellers to access medical expertise without physically visiting healthcare facilities

• Pre-deployment medical training: provide comprehensive medical training and resources to travellers before their deployment to high-risk regions. This includes first aid training, basic medical procedures, and guidance on managing common health issues and emergencies

• Onsite medical support: deploy medical personnel or establish
medical clinics in high-risk regions to provide onsite medical
assistance to travellers. These medical professionals can offer
primary care, emergency treatment, and preventative services to mitigate health risks

• Local partnerships: collaborate with local healthcare providers, hospitals, and organisations in high-risk regions to enhance access to medical care for travellers. Establishing partnerships enables quicker response to medical emergencies, facilitates coordination for medical referrals and support, and, in some cases, a local bank account must be used for payments

• Emergency response plans: develop comprehensive emergency response plans tailored to the specific risks and challenges of each high-risk region. These plans should outline procedures for medical emergencies, including evacuation protocols, communication channels, and coordination with local authorities and medical facilities

• Medical supplies and equipment: ensure travellers have access to essential medical supplies, medications, and equipment necessary for managing common health issues and emergencies in high-risk regions. Pre-position medical kits and supplies in strategic locations for rapid deployment

• Crisis management coordination: coordinate closely with
government agencies, embassies, international organisations, and other stakeholders involved in crisis management and emergency response efforts in high-risk regions. Establish clear communication channels and protocols for information sharing and coordination of medical assistance

• Continuous evaluation and improvement: regularly evaluate the effectiveness of medical assistance strategies in high-risk regions and identify areas for improvement. Incorporate lessons learned from past experiences and feedback from travellers to refine and enhance medical support services.

Insurers are increasingly challenged to adequately mitigate danger in high-risk regions. Threats surrounding climate change, cybersecurity, terrorism and geopolitics continue to grow worldwide, the effects of which result in unique consequences for each country. Through research, collaboration and meticulous planning, companies strive to maintain pace with today’s world.