Travel Insurance: Strong medicine in a single dose

May 21, 2009

May 19th, 2009    by IsaacCymrot

There is one over riding complaint that I hear from almost every agent this year. You are frustrated with the reduction in commissions, whether due to cuts by suppliers, the impact of clients buying cheaper trips, or the rise in Non Commissionable Fares (NCFs).  Despite seeing an increase in the number of policies sold this year, I am still baffled by the overall sales closing ratio for many agencies remaining so low.  In 2007 the United States Travel Insurance Association (USTIA) found that travel agents only sold third-party travel insurance 30% of the time–30%!

In today’s market it is remarkable to see the amount of insurance commission that travel agents still leave on the table despite their business challenges. You face shrinking commissions, increasing NCFs, and concerns about the financial instability of many tour suppliers. Bankruptcy and default is the most important reason for you to offer a third party insurance policy, especially in today’s economy.  Tour supplier’s cannot cover themselves for bankruptcy and default and if you have been in the industry long enough have probably been affected by these events.  However, there is more than one reason to offer third party travel insurance and they can benefit both you and your client.

Third-party travel insurance pays the highest commissions in the industry.  All major travel insurance companies offer commissions ranging from 15% to 38% or more. This dwarfs the 10% paid by most tour suppliers.  Additionally, some third-party travel insurers offer agents commission protection (protecting as much as 15%). This compares to most tour suppliers that cap their commission protection at $100, if they offer any at all.

The best way to demonstrate the profitability of a properly executed insurance program is to give some agency examples. When offered with conviction and included as part of the sale price, third-party travel insurance offers the best protection to the client and the agency, while delivering a significant amount of money to these agencies’ bottom lines.

The agency in each of the following examples increased their third-party travel insurance sales by at least 25%. One agency now closes insurance with 70% of their travel sales!  That translated into an additional $12,350 in commission in 2008 for this retailer. Even the agency with the smallest increase (26%) still earned $7,000 more than the prior year.

The first example is a medium-sized agency that previously offered the client the option of tour supplier insurance or third-party insurance.  Typically, the client would pick whichever option was cheaper and ignored the differences in coverage.  One client suffered a heart attack during their vacation.  It was later determined that the attack related to a pre-existing condition.  The client had purchased the tour supplier’s insurance which offered no pre-existing medical conditions coverage.  Unfortunately, this agency’s client was stuck paying a $10,000-plus medical bill because the tour supplier insurance denied their claim due to a pre-existing condition.

The incident convinced the agency owner that it was imperative to only sell a third-party travel insurance company that offered a pre-existing conditions waiver.  At the time the agency was only selling third party insurance to 13% of its clients.  In three years since making the change to exclusively offer third-party insurance the agency’s sales increased to 70% on third party insurance. Their commissions have increased substantially.  Additionally, the agency recovered a total of $3,000 in lost tour supplier commissions by using the commission protection benefit offered by their third-party insurance provider.

A second agency offered their clients a choice between two competing third-party travel insurance companies, but one client suffered a similar loss. One of the agency’s best clients referred his brother to the agency to book his vacation.  The brother had always booked his travel online and had never used a travel agent. This time he chose to use a travel agent because he was planning an expensive two-week trip to Asia.  The agent arranged the trip which cost over $17,000.

When the time to talk about insurance arrived, the agent handed the client two brochures from competing travel insurance companies.  The client rejected both policies, did not sign a waiver and chose to travel without any trip cancellation coverage.  Three days before the client was scheduled to depart on the trip he had to be hospitalized.  The doctor advised that he must not go on his trip.  The brother lost his $17,000 vacation and sued the agency for not recommending a travel insurance product.  The agency also lost one of its best clients for failing to insist that the brother add an insurance plan.

The agent asked the client’s brother why he had not purchased the insurance that was offered to him. His answer was that because the agent could not confidently recommend one insurance company over another he did not feel comfortable buying either product. This incident convinced the agency owner to offer only one insurance product.  This new approach immediately inspired new client confidence in the agency’s recommendations.  The simple switch helped increase the agency third-party insurance sales by 38% in the first year.  The result was an additional $9,500 in commission for the agency.

The last example is an agency that offered one third-party insurance product. It limited the amount of tour supplier insurance that was offered and sold to the client.  The agency owner, seeing that he was losing revenue due to clients declining coverage, implemented a system requiring the agents to include insurance with their quotes.  The owner had felt clients were hesitant to spend extra money even if they felt insurance was a good idea.  By including insurance in each trip quote the agent never had to ask the client to spend extra money.

This agency has been using this model for only six months and has seen insurance sales increase by 26%.  If you calculate this growth on an annual basis, it results in almost $7,000 in additional commission to the agency.

The agencies in all of the above examples have increased their annual insurance sales dramatically. In each case the owner made similar changes.  The changes included:


  1. Instructing his or her agents to include the travel insurance cost when they quoted their clients. The trip quote included the following statement: “This quote includes your trip cost, airfare, taxes, fees and optional travel insurance.”
  2. Requiring a signed client waiver acknowledging that third- party insurance was offered by the agent but declined by the client. This procedure was required before the agent was authorized to release travel documents to the client. Additionally, the signed client waiver releasing the agency was required even if the client purchased a tour or cruise supplier’s own insurance.
  3. Recommending only one travel insurance product. Discontinuing the practice of presenting two or three insurance brochures for the client to pick from.


When it comes to travel insurance you want to do the best thing for your client. Travel insurance can be a confusing and intimidating subject for many people, requiring some guidance from you as their agent.  If you take the time to learn the basics and recognize the advantages to be gained for both your clients and your agency from developing your own working knowledge of the subject, you will become more and more comfortable recommending third-party travel insurance.

As a travel professional you spend hours learning about the destinations and cruise ships that you sell on a daily basis.  The more you study the more comfortable and confident you become making recommendations to your clients.  Travel insurance is no different.  If you take the time to partner with one travel insurance company, and have someone you trust assisting you, then you will be able to implement the same strategies mentioned in the examples above.

There is plenty of uncertainty in our industry today, reflecting the unstable economy.
It is important to know how every potential travel risk situation could affect you and your client.  There is a healthy balance involved in doing both what is right for your client and remembering at the same time the best interests of your agency business. You can immediately satisfy both needs by offering a third-party travel insurance policy to every single person that buys a trip from your agency.

Challenge yourself for one month to adopt all three strategies mentioned in this article and find out for yourself how successful your travel insurance program can become.


Challenge & Opportunity – Flu Outbreak Puts Consumer Focus on Travel Insurance

May 15, 2009

One visible effect of the recent H1N1 flu outbreak was the raised awareness of the traveling public about the importance of travel insurance. In addition to seeing daily news coverage of the outbreak itself, travelers with either existing bookings or plans to make them saw daily news stories about travel insurance. Our Travel Insured International customer care department did an outstanding job of answering questions from thousands of customers calling about their Worldwide Trip Protector plans and how their coverage would apply in the face of the H1N1 flu risk.

Everyone at Travel Insured is indebted to our travel industry partners who demonstrate their true professionalism when a sales challenge like the flu outbreak occurs. You were able to answer many clients’ travel insurance questions or, if not, were involved in getting the answers from your TII Regional Sales Manager or one of our Customer Care Representatives. Without your level of commitment, we truly would not be able to do our jobs helping your clients.

Your clients should be more aware than ever, and you should now be more willing to remind them, that travel insurance is a necessary part of any travel booking they make in the future! Here are some key points about the flu outbreak, and its coverage in our Worldwide Trip Protector family of insurance plans:

  •  If covered travelers contract H1N1 flu before or during travel, including in Mexico, coverage will be provided them for sickness medical expense as specified in the terms of their plan.
  • If covered travelers have purchased optional Cancel for Any Reason coverage, they may cancel their trip anytime up to two days before departure and receive up to 75% reimbursement of their prepaid trip cost.
  • Fear of contracting flu while traveling is unfortunately not a specific covered reason under Trip Cancellation for canceling a trip. However, customers who wish to have Trip Cancellation protection against a flu outbreak in future should purchase the Cancel for Any Reason option as the way to obtain that coverage.
  • If covered travelers are quarantined before or during travel due to an illness, coverage may be included under Trip Cancellation, Trip Interruption or Trip Delay provided the person is restricted to their home or a medical facility, not restricted from one country or destination.
  • Many travel suppliers, including cruise lines, have changed itineraries to avoid a flu outbreak. Insured travelers may be covered for Missed Port of Call coverage if their original itinerary is changed and, as a result, they forfeit their prepayment of non-refundable activities. Additionally, travel dates can be adjusted on a customer’s Worldwide Trip Protector plan if they have not filed a claim and have not yet departed on the trip.
  • Travel Insured’s Worldwide Emergency Travel Assistance is a service included with every plan we sell. Your clients can contact this service, with a free call from anywhere, whenever they need emergency medical assistance during their trip!

Agent Advisory – Do Your Clients Have Passports for June 1 Cruise, Border Deadline?

May 12, 2009

The U.S. State Department web site now has a “countdown clock”counting down the days, hours, minutes and seconds to June 1, when new passport or passport card requirements go into effect. After several postponements to give citizens more time to obtain passport documents, the government will put the land and sea requirements of the Western Hemisphere Travel Initiative (WHTI) into force.

U.S. citizens entering the United States at sea or land ports of entry from Canada, Mexico, the Caribbean or Bermuda must have a passport or passport card. U.S. citizen children under the age of 16 will be able to present the original or copy of their birth certificate, or other proof of U.S. citizenship such as a naturalization certificate or citizenship card. The Passport Card, available through the State Department, costs $45 and is valid for 10 years for adults or 5 years for children under age 16. It is important to note that the cards, while good for a cruise or land re-entry to the U.S. are not good for international travel, which requires a full passport. This means that if there is an emergency requiring a flight home from outside the U.S., lack of a regular passport for entry could create a hassle and a delay.

Find out more information about the passport card. Regular passports, valid for all international travel and border crossings are priced at $100 per adult and $85 per child under age 16. Passport renewals by mail are $75. Go to http: and click “Passports” for more information.

The U.S. Customs and Border Protection (CBP) Department issued a statement in late May saying U.S. and Canadian citizens who lacked proper documents, but are otherwise admissible to the U.S., will NOT be denied entry, such as those returning to the same U.S. port they departed from on a cruise. Those travelers are encouraged to continue their travel plans. However, the government officials are still urging travelers to become compliant to the law requiring passports, passport cards of the new U.S. Customs enhanced drivers’ licenses as soon as possible to avoid unnecessary cross border hassles.

Group Insurance – Insure Family Reunions for 10 or More & Recommend Options

May 12, 2009

Summer vacation time is also family reunion time and Travel Insured has updated our group protection plans just in time for your clients’ mid-year rendezvous. It is now possible for family groups of 10 or more to travel on the same Group Lite or Group Deluxe plan. Group coverage provides affordable yet strong protection with the requirement that all the group members travel on the same dates and itinerary. They need not, however, be originating from the same airport if headed to the same destination on the same day. The plans can be sold as either inclusive, requiring all members to buy the coverage, or voluntary with each member deciding to accept or decline.

It is important for family groups to consider a Cancel for Any Reason option, which must be purchased within 14 days of the initial trip deposit. It is especially valuable if the family reunion is going to be a destination wedding. Here’s why: a disagreement among members that results in someone deciding not to take the trip is not a covered reason for Trip Cancellation. The Cancel for Any Reason option allows a member to cancel up to two days before the scheduled departure date and obtain up to 75% of the prepaid non-refundable trip cost in reimbursement.

Sales Tip – Keep TII Coverage if a Supplier Changes Dates or Destination

May 12, 2009

Many travel suppliers, such as airlines, cruise lines and tour operators, have been working with customers to reroute or reschedule travel arrangements due to the flu outbreak in Mexico with no penalties or fees. We are able to adjust the travel dates on your client’s policy provided they have not filed a claim, their new travel dates are within 18 months of their original insurance application date, and they have not yet departed on their trip.   If the supplier is charging your client a change fee, we will not be able to cover that unless your client files a claim on their existing policy. If they choose to file a claim, they will need to purchase a new policy for the new trip.

You can find answers to more of your clients’ questions about insurance coverage related to the H1N1 Flu outbreak by visiting the news section of and clicking on the flu update, or by linking here .

Industry News – Interactive Travel Assoc. Says Flu Not Proving Fatal to Travel

May 12, 2009

The Washington D.C.-based Interactive Travel Services Association (ITSA) said that the American traveling public is following President Obama’s advice to “use prudence, not panic” in planning travel in the wake of the H1N1 flu outbreak in Mexico. ITSA’s Executive Director Art Sackler issued reassuring news on May 5, following an informal poll of his online agent membership, which includes companies like Expedia, Travelocity and Orbitz. Sackler reported that “according to Global Distribution System and Online Travel Company members of the Interactive Travel Services Association, business and leisure travel continues, despite a decline to Mexico as travelers proceed with caution. Our members are seeing very few cancellations outside of Mexico.”

Sackler said many ITSA members were waiving change and cancellation fees in order to rebook clients to new travel destinations. “There are no advisories concerning travel to or throughout the US, to Europe, the Caribbean and a host of other destinations,” Sackler’s ITSA announcement added. “Travelers can take advantage of extraordinary savings and value now for business and leisure trips in many locations outside of Mexico. By exercising caution and some common sense, and guided by the advice of WHO [World Health Organization] and CDC [Center for Disease Control], travelers can still go ahead with their plans without undue concern throughout much of the world.”

Industry Events – TII National Accounts Mgr. Herlihy to Join Home-Based Expo Panel

May 12, 2009

Travel Insured International’s Manager of National Accounts Kevin Herlihy has been invited by James Shillinglaw, Editor-in-Chief at Performance Media Group and its Travel Pulse online news service, to appear on a supplier panel at Performance Media’s upcoming “Virtual Home-Based Agent Expo,” slated to stream online on Tuesday and Wednesday, June 2 and 3rd. Agents can register for free at the site to view the panel from their own computer on those days, and will also be able to view a video of the session on demand through September 2, 2009.

The panel, according to Shillinglaw, will be on the topic of new “Revenue Opportunities for Home-Based Agents from Ancillary Sales.” Herlihy will discuss sales and earnings opportunities for home-based agents in selling travel insurance. Other panelists discussing opportunities with moderator Shillinglaw will be Rail Europe’s Vice President of Sales Peter Rahaman and Auto Europe’s New York Regional Sales Director Joseph Maniscalco..

Herlihy, who has been with Travel Insured since 2000, is familiar to many industry agents and suppliers through his frequent appearances representing Travel Insured at industry trade events. Home-Based and other agents can learn more details about the upcoming show by visiting its dedicated web site at