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Thu 1 Feb 2007 12:00 AM

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Travelling undercover

Travel agents who fail to sell travel insurance policies to customers are not only missing out on good commission-earning opportunities, but are also putting clients in a position that really could cost them an arm and a leg

Travel insurance has, and always will be, an essential product for travellers and an easy sell for agents. It can ultimately save time, money, and lives in the event of a travel emergency.

Not only does it grant the policyholder peace of mind when travelling, in the event of an emergency, funds will be made available for whatever treatment is necessary.

Inevitably, most travellers find that they do not need to make a claim during the course of their travels, leading them to ask whether there was any point in taking out the policy in the first place..

It is this complacency, combined with travel agents’ apathy towards selling travel insurance that has led to a situation in the Middle East where most travellers don’t even think about insuring themselves against disaster.

Travel insurance is one of a number of potentially profitable extras many agents fail to sell to customers, and in many cases they are neglecting their obligations as a travel professional.

For example, travel insurance is a prerequisite for clients travelling to Europe who require a Schengen Visa, so agents are obliged to make sure that customers have a policy providing the required level of cover when they issue tickets.

But, according to Ben Kurian, general manager Middle East, North Africa of Dubai-based online travel agency, Octopus Travel, this does not always happen.

“I’d be very surprised if anyone suggests [travel insurance] until you ask for it,” he says.

And according to anecdotal evidence provided by the insurance companies with whom ATN spoke, most Schengen policies available are inadequate, little more than a piece of paper confirming the traveller has bought a policy providing little or no financial coverage.

“The Schengen embassies or countries are to be blamed for that; they should carefully read what [the policy] covers and how much it covers [before they issue a visa],” Kurian adds.

Norman Cloke, regional manager, Middle East of UK-based insurance company, Holiday Guard concurs: “Travel insurance is woefully under sold in this part of the world,” he explains.

“It is a requirement for the Schengen visa, but what is happening is that people aren’t really buying insurance, just a policy to cover the Schengen requirement. If they pay a few dollars more, they can get coverage for lost luggage, cancellation charges and everything else.”

As well as putting the welfare of customers at risk, agents are missing out on lucrative profit opportunities at a time when commission from other sectors is being slashed, Cloke adds.

AIG Travel Insurance’s regional assistant vice president, travel services, Middle East, Mediterranean & South Asia, Baldev Singh, has watched the growth of travel insurance sales in other regions, and says that the active selling of travel insurance is still at a “nascent stage” in the Middle East.

“At a time when airline commissions are nose diving, travel insurance is becoming a significant contributor to the earnings of the agencies,” he explains.

And unlike other products like car hire and accommodation, customers are unlikely to ask for a discount with travel insurance, he adds.

According to Holiday Guard’s Cloke, a survey recently conducted by a major UK insurance company found that around 4% of the UK’s travelling population “forgot to buy” travel insurance.

“Here we are not even hitting 4% of people getting travel insurance,” says Cloke.

“Take an agency selling around 250,000 tickets a year. If they were selling insurance to 4% of that, that comes to 10,000 policies. Our average policy sale is about US $100, so say that comes to $1 million. They would make about 20% commission on that, which would be $200,000.”

That would pay for around seven full-time members of staff for a year, one of which could be dedicated to selling insurance, he adds.

The UK-based firm is renowned for its easy-to-understand and transparent policies, providing cover for all eventualities. Its low excess charges and reasonable rates have also won the company popularity in the region, particularly with big agencies such as Dnata Holidays.

“With some companies you end up paying massive excesses,” says Kurian at Octopus Travel.

“You know how it is – you’re in a foreign country, you get food poisoning at a restaurant and you have to get your stomach pumped. That can cost you a lot of money, and if you have to pay the first $100, then what is the point of having [insurance] in the first place?”

Agents should be familiar with the different policies available, so they can make customers aware of things like excess or ‘deductible’ charges, he explains: “When a customer goes into a travel agency, they are looking for guidance more than anything else.”

The cost of not selling

In this part of the world, some of the typical eventualities covered by the average insurance policy are more useful than others, and should make it easier to sell policies to customers.

“Cancellation charges can happen to anyone, especially in Dubai,” says Kurian.

“You could get stuck in the traffic and miss your flight, or have an accident on your way to the airport, which is very likely on Sheikh Zayed Road [in Dubai].”

According to Kurian, some of the few companies that do actively sell insurance are the airline-based tour operators, such Emirates Holidays, Etihad Holidays or Gulf Air Holidays.

“It actually helps them, because if there is a cancellation, the client is covered, and doesn’t need to hassle [the company],” he explains.

Holiday Guard’s Cloke points out the massive expenses that can be incurred if passengers suffer delays or miss a flight that is taking them to a cruise ship, which leads to them finding themselves stranded in a foreign country.

In the event of an emergency, customers are likely to think about who to blame or thank for the outcome, says AIG’s Singh.

“Travel insurance sales put a ‘we care’ smile on the face of the travel agent,” he explains.

“If an accident happens, any opportunity to assist your customer in the time when he needs it most will strengthen the bond between the traveller and the agent.”

In a part of the world where word-of-mouth is the best form of marketing, this kind of reputation is priceless, he adds.

According to Hemant Gupta, manager – travel, Gulf Region, AXA Insurance Gulf, the lack of training or incentives is a major obstacle preventing agents from selling travel insurance and lack of consumer awareness adds fuel to the fire.

“Travelling without insurance is like skydiving without a parachute,” he says.

“A travel agency should reflect its image as a complete travel solutions [provider] and not just a ticket selling company.”

The sales pitch

Holiday Guard:

the UK-based firm has a maximum of $50 excess on any claim. Worldwide cover starts at $52 for five days, or $32 excluding North America. Annual multi-trip travel policies (up to 31 days per trip), and including 14 days winter sports coverage, cost $210 per person, or $396 for a family of two adults and two children. Cover for additional children cost $106 each. Visit


the Middle East branch of AIG has Platinum, Gold and Family levels of cover. Worldwide cover starts from AED 99 ($27) for seven days, or AED 73 ($20) excluding North America. Annual multi-trip policies covering the entire world costs AED 467 ($127) per person, or AED 698 ($190) for a family of two adults and unlimited children. Visit


AXA Insurance Gulf:

the Gulf branch of AXA only offers individual coverage. Worldwide cover starts from AED 130 ($35) for five days, or AED 95 ($26) excluding North America. Annual multi-trip policies covering the entire world costs AED 1200 ($327) per person. Visit

. Additional charges apply for activities such as winter sports, on all of the above policies.

Holiday Guard: 10 good reasons why


when you check your bags in at the airport there is a one-in-200 chance they will not turn up at the other end.


this can be very expensive if it happens near to the departure date and full payment has already been made.


muggings and theft in tourist areas are on the increase around the world.

Delayed flights:

can result in extra expenses.


do happen in some parts of the world and can result in extra expenses.

Lost passports:

extra expenses will be incurred for replacement.


something might happen resulting in having to cut a holiday short and return home.

Missed flights:

can lead to “no show” charges or having to buy new tickets.

Property damage:

if you damage someone else’s property and they claim against you.


the World Health Organisation claims that nearly 50% of all travellers who travel for more than one month are likely to suffer an illness or accident.

"Travel insurance is woefully under sold in this part of the world."
"At a time when airline commissions are nose diving, travel insurance is becoming a significant contributor to the earnings of the agencies."

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