Demand for premium insurance rises with global travel disruptions

With flight cancellations, delays and other disruptions on the rise, leisure travelers are being increasingly discerning over the level and type of insurance they buy and businesses are turning to specialist advisory services to limit risk.

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Since 2019, travel disruptions around the world have risen due to everything from the coronavirus disease 2019 (COVID-19), extreme weather, volcanic eruptions, military conflict, jet safety issues, computer glitches and fires which have closed airports, grounded planes and stranded millions of passengers.

In the US, ongoing air traffic controller shortages and aging technology have caused significant disruption. In May, equipment outages, runway construction and staffing shortages caused flight cancellations, diversions and delays at Newark Liberty, one of the main airports serving New York City.

On Friday, Israel attacked Iran, forcing carriers to cancel or divert thousands of flights to avoid conflict in the Middle East.

Even with insurance, many policies specify a multitude of exemptions in the fine print.

As a result, more travelers are taking out higher-end insurance policies, often at higher premiums, to better protect themselves, according to interviews with nine travel executives, insurance companies and analysts.

"We're in times that are quite unstable so people are canceling more frequently than previously," said Duncan Greenfield-Turk, chief executive officer (CEO) of Global Travel Moments, a luxury travel agency based in London.