Sellers of travel insurance are reporting that sales to
customers headed to Brazil this summer, where the 2016 Olympic Games will take
place from Aug. 5 through 21, are a mixed bag, with some seeing as much as a
60% increase and others just as much of a decrease.
When it comes to deciding on whether or not to travel to the
Olympics in Rio de Janeiro, many factors come into play that travelers have to
juggle, including the Zika virus, political unrest and an unstable economy.
Insurers agree that events such as the Olympics typically
result in an increase in sales. For example, Berkshire Hathaway Travel
Protection is anticipating a 13% to 15% sales increase as a result of the
Games.
In the past, InsureMyTrip CEO Jim Grace said, the insurer
has seen large increases in customers traveling to the Olympics. For the 2014
Winter Games in Sochi, Russia, InsureMyTrip saw a 200% increase over typical
travel volume. The 2014 World Cup, which was held in Rio, also saw a 200%
increase. Conversely, however, Grace said InsureMyTrip is seeing a 60% decrease
in travel to Brazil this summer.
Some insurers are seeing a bump in sales to Brazil. They
include Allianz Global Assistance, whose director of communications, Daniel
Durazo, said the insurer has seen a 63% increase in policies sold to travelers
heading to Rio versus travelers last year, “considerably higher” than the 36%
increase Allianz saw with the 2012 London Olympics.
The same factors keeping some travelers away from the Games
this year, such as Zika and the desire to have medical and evacuation coverage,
might spur others to purchase insurance for their trip. The political and
economic climate in Brazil are also likely on travelers’ minds, with heightened
media concentration on those issues as the Games approach.
“The steep increase in travel insurance policies sold for
this Olympics most likely reflects the perceived risk of traveling to Rio,
compared with a destination like London, where Americans may feel more
confident regarding safety and health care,” Durazo said.
Zika looms large in travelers’ minds, according to Jeff
Rutledge, CEO of AIG Travel.
“We have not experienced an increase [in insurance sales]
that we can specifically attribute to the Olympics,” he said. “But we have seen
an increase in inquiries regarding Zika from travelers with existing policies
who are traveling to affected areas.”
Travelers are also heading to unaffected areas now. Travel
Insured International has “seen a shift away from destinations that are affected
by Zika,” said Isaac Cymrot, vice president of industry relations.
Potential travelers’ perceptions of Brazil, including the
state of medical facilities there and whether or not travelers could be
evacuated, are also a factor in whether they buy insurance, according to Jason
Schreier, CEO of April Travel Protection.
“I don’t think that really rings true in some of the big
cities there in Brazil, but it’s still a perception that could lead to more
sales coming our way,” he said.
Christine Buggy, vice president of marketing at Travelex,
said the hype that comes with the Games is a big factor.
“When you hear the publicity surrounding the Olympics, it’s
not only Zika that is causing people to have concerns,” she said. “It’s the
political environment, it’s the economic environment and also they just don’t
feel that the water’s safe down there. So I think it just compounds everything
together.”
Buggy said she believes that as more U.S. athletes are named
to Olympic teams, sales of insurance to their families and friends will pick up
overall purchases.
Currently, according to the U.S. Olympic Committee, just
over 160 athletes comprise Team USA, and that number is expected to reach more
than 500.
Lagging ticket sales will also likely result in last-minute
sales on trips to the Olympics, Grace said, which could also lead to an
increase in the number of policies sold.
“I’m going to guess that in the last week or two [before the
Games] we’re going to see a spike in purchases for travel insurance,” he said.