Travel insurers are reporting that interest in and sales of annual travel insurance policies are soaring, a trend they attribute largely to heightened awareness of travel insurance and the fact that consumers are taking more trips each year, giving them an incentive to jump from a single-trip plan to a multitrip plan.

"We absolutely see an uptick in it," Jason Schreier, CEO of April Travel Protection, said of annual policy sales. "I think it goes in line with a continued improvement in the overall understanding of the travel insurance market, which is by no means mature in this country yet."

Allianz Global Assistance is also seeing growth in annual policies. Overall, annual policy sales are up 48% year-over-year, according to Richard Aquino, vice president of sales. Travel agent sales of annual policies are up 67%.

Aquino said agents are putting the product in front of clients who take multiple trips each year, resulting in the growth of the annual product specifically. Consumers, he said, are more attracted to annual insurance products because they are taking more trips.

Right now, insurance comparison site offers just one annual policy through its insurance partners. But consumer demand is changing that, according to co-founder Stan Sandberg.

"We've seen an increase in requests and inquiries about annual policies, and we are going to be launching what I'd call a range of products in annual policies from various providers," Sandberg said. 

The products are expected to launch late in the fourth quarter of this year or early in the first quarter of 2019.

For the past 18 months, travel insurer Arch RoamRight has also seen "high double-digit increases" in annual plan sales, according to Cory Sobczyk, vice president of business development. He did caution that the uptick Arch is seeing could be "because of our overall increase in market share over the past year." He added that annual policies still make up a small percentage of Arch's overall portfolio of products.

On the other hand, Sobczyk said, the uptick could also be the result of increased consumer travel and a jump in travel agent sales.

"We believe travel advisers are always searching to find the best possible way to service their travelers," he said. "In this case, they are looking to determine if a multitrip plan is a better option than a single-trip plan."

He added that most of Arch's clients still prefer single-trip policies.

The differences between annual travel insurance policies and single-trip policies vary greatly depending on the policy itself, the traveler and the type of trip. Generally, annual policies offer coverage similar to single-trip policies, such as trip delay and medical, but at lower benefit levels. 

Some annual policies do not offer trip cancellation coverage, and most have annual limits on all coverage.

With annual policies, Aquino said, "the benefits come along with pricing." 

The cost of a basic annual policy with Allianz starts at around $99 and goes up from there. A policy with better benefits might run around $200, he said. Single-trip policies, on the other hand, tend to cost between 7% and 10% of the insured trip's cost.

Financially speaking, Schrei-er said, annual policies tend to make sense for travelers taking two to three trips or more each year.

"You can already get a return on your investment in certain cases in just two trips," he said. "And I would think, for almost anyone, you'll find the return on investment once you hit that third trip."

Trip cancellation coverage is one of the biggest differences between annual and single-trip policies, Sandberg said.

"The limits on an annual plan will be smaller than if you were buying an individual plan," he said. "So if you're taking very expensive trips in a given year, spending $10,000 or $20,000 on a trip ... you're not going to be able to cover the trip cancellation piece, or at least not be able to cover it 100% with an annual plan."

When it comes to commissions, in most cases agents benefit most from selling single-trip insurance policies. 

"There's definitely more financial reward for the agent if they are selling a per-trip product, because a per-trip product is going to be more expensive, but it's going to cover more," Aquino said.

However, he said he believes agents are looking more at what most benefits their clients in the end, and today they are offering a suite of product options, including annual policies; hence the uptick in annual policy sales.

Schreier also pointed out that annual policies offer agents another reason to get in touch with clients throughout the year when their policy is set to renew. 

Most agree that single-trip policies will likely remain the dominant insurance product, but annual policies will continue to see popularity. Sandberg, who forecasted continued growth in annual policies, described it as insurance that will "represent a niche or a specialized kind of traveler."

Schreier said, "I don't think it's a trend. I think it's a foreshadowing of what's to come."


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