Travel Insurance For South America – Latin America presents both challenges and opportunities for travel insurance and support providers. Brazil, Mexico, Colombia, and Argentina have the largest populations and most developed markets for providing these services.
Both inbound and outbound tourism across the region have been hit hard by the impact of the COVID-19 pandemic (see Table A). But since the pandemic, product penetration has increased and many tourists no longer travel without insurance, either by choice or government regulations. A June 2020 survey conducted by travel assistance provider Universal Assistance found that 88% of Latin American travelers now view travel health insurance as essential to their travel plans. And major companies such as Argentina’s largest airline, Aerolineas Argentinas, now include travel insurance in their product offerings, something they had not considered before the pandemic.
- Travel Insurance For South America
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Travel Insurance For South America
Aside from Brazil, the main language in the region is Spanish, which creates all kinds of synergies for the industry and facilitates regional travel. Latin Americans also share a common cultural background, making it easier for companies to test local businesses, market their messages uniformly, and manage cross-border operations. Lastly, travelers to this region value time with their families and usually have the opportunity to enjoy it. On average, employers in Latin America provide 15 days of vacation per year. (See Table A)
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But the pandemic and subsequent costly quarantines have depleted the savings of many middle-class Latin Americans. Record unemployment has reduced consumers’ ability to enjoy vacations and led to a decline in disposable income. Currently, international travel in Latin America is a luxury enjoyed by a small niche market.
Digital distribution networks will continue to grow in most countries, followed by significant innovations in customer service, especially in developed markets such as Mexico. Verification of application without prior approval from insurance company; streamlining customer service; Technology investments in all areas of operations, especially application programming interface (API) connectivity to large databases, are all key to success and represent the single largest shared opportunity for industry players.
And with an endless list of exotic destinations, domestic tourism in Latin America remains strong and accommodates larger numbers of travelers than international tourism. Providers with the ability to build a strong national network benefit from full control of loss ratios and incurred but not reported (IBNR) claims, which is ultimately reflected in more competitive premium costs.
Domestic tourism is active in Brazil, with 81% of potential travelers planning to travel domestically in 2021. Brazil, the world’s longest country, stretching 4,395 kilometers from north to south, has thousands of destinations of interest to its residents, such as Porto. Seguro (Bahia), Maragogi (Alagoas), Porto de Galinhas (Pernambuco). Even before the pandemic, domestic tourism in Brazil outpaced international tourism. Demand for travel insurance in Brazil increased by 10% between 2018 and 2019, according to data from Assist Card, the Brazilian travel insurance market leader. This growth was primarily driven by domestic tourism, which accounted for 47% of the company’s total travel insurance revenue in Brazil. This compares to 37% the previous year.
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Despite being a rapidly developing market, Brazil has strict regulations. This country is unique in Latin America in that it classifies travel insurance as general insurance. This means minimum capital requirements and strong government oversight for companies. Entering the Brazilian insurance market is relatively difficult compared to other Latin American countries.
Therefore, Brazilian insurance regulator Susep is trying to implement an open insurance model based on information sharing to make it easier for customers to buy the best products and to give insurers access to customer data. Customers agree to share The plan, which does not yet have a defined implementation plan, would also allow insurers to skip middlemen and serve the public directly. This will be another blow to offline travel agencies, which are already losing share to local online travel agencies such as declar.com, 123milhas.com and hoteis.com. Only the biggest agents (CVC, Abreutur and Flytour) can survive in Brazil in the long term.
In 2017, only 35% of Brazilians had insurance for international travel, and only 15% had it for domestic travel. Increased traveler interest in insurance post-pandemic will certainly drive growth in the industry. Despite relatively low traveler flows in 2021, Brazil sold 10% more travel insurance products than before the pandemic, according to Assist Card.
Mexico is uniquely positioned as an international tourism destination as well as being the world’s largest outbound travel market. Before the pandemic, 40 million U.S. visitors entered Mexico each year and 18 million Mexicans traveled to the United States, with land travel rivaling all other modes of transportation. (See Table B) As a result, car rental insurance is an active and competitive market.
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Tourism from Mexico to the Caribbean, especially cruise lines, is also well developed and product penetration has increased. According to Allianz, in 2017, only 27% of Mexican families had travel insurance when traveling internationally and only 10% when traveling domestically. Now, Assist Card estimates that 60% of Mexicans purchase travel insurance when traveling abroad. This includes travel medical insurance, as well as trip cancellation insurance and coverage for flight interruptions and delays. Borders were unexpectedly closed to prevent the spread of the disease.
Overall, the Mexican travel insurance market is competitive and mature by Latin American standards. Many of the world’s largest insurance providers already operate in Mexico, including Allianz, Chubb and AXA. Active players and supports are also iKé and MAPFRE Asistencia.
Beyond exploring new distribution channels, new and existing players can find opportunities to leverage global distribution systems (GDS) such as Navitare, Sabre, and startup Wooba. Airlines, travel agencies and major players share tourism information including destinations, group sizes and hotels, among other key data points that can be analyzed to develop customized insurance offers.
Argentina has a unique cultural affinity with Europe among its Latin American neighbors, resulting in a high volume of travel both inbound and outbound. Before the pandemic, an average of 700,000 Argentines traveled to Europe each year, and an average of 500,000 Europeans visited Argentina each year (see Table C).
German Healthcare Statistics
Domestic tourism is also strong. For example, Bariloche is an important year-round destination, attracting tens of thousands of visitors from Buenos Aires every year, including for winter skiing. Assist Card operates its own medical center there. It is a pilot project in Latin America and a unique initiative that allows support operators to directly manage their own networks. The Argentine market is led by Assist Card and Universal Assistance.
Helping these two companies expand their networks and improve the post-sales customer experience may present the biggest near-term opportunity in this market. Customer experience is very important in Argentina, especially to reduce the need for users to spend out of pocket. Provide emotional support when filing a claim. We provide support in Spanish along the way. PaxAssistance, led by former Assist Card CEO Alexia Keglevich, is a customer experience-focused startup that’s sure to grab travelers’ attention by focusing on emotional support in emergency situations.
Once the fifth-richest country on Earth, Argentina has suffered decades of sustained economic stagnation. Argentina, once the largest middle class in Latin America, is now as polarized in wealth as Mexico or Peru. However, Argentina still has a significant, wealthy segment that drives outbound travel, and the growing number of Argentine expats living abroad helps keep inbound traffic at robust levels.
Colombia offers one of the most diverse ecologies in the world and is full of regional, cultural and geographical diversity that fascinates those who want to visit. Domestic tourism is strong, especially today when the currency is undervalued. However, domestic tourism destinations remain underdeveloped and struggle to accommodate the huge potential demand. Caribbean resorts such as Santa Marta, San Andres and Cartagena face infrastructure bottlenecks that are hindering future growth. Many other destinations are smaller and lack highways and air routes. The latter is more expensive and connects to the hub via Bogotá.
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Colombia has not been able to increase its international appeal from a single destination like Peru did with Machu Picchu. Colombia also suffers from exaggerated images of violence and unrest, despite being a safer country today than Mexico or Brazil.
However, with more than 3 million Colombians living abroad, their regular visits to their hometown account for a significant portion of the inbound traffic volume. Most relevantly, Colombia is a strong outbound international tourism market, with over 3.5 million Colombians leaving their home country in 2019, traveling first to the United States and then to Mexico, Spain, Panama and Ecuador.
Latin Americans generally want self-service. The ability to book and manage bills digitally is standard in the region. mainly
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