AGENTS looking to avoid policies that penalise older travellers face a lengthy job sifting through the many options on the market.
Age loading, typically doubling or trebling premiums for people aged 65-75, were a standard feature on single-trip policies about three years ago.
Now the criteria applies to different geographical areas, varying ages and length of travel as insurers try to avoid big claims but keep a competitive edge.
The exception is an annual policy because of the high risk in insuring older people over a 12-month period.
For instance, ABC Travel Extras and Sterling Travel Insurance annuals cannot be sold to clients aged over 69, and JS Insurance Management's Frequent Traveller policy cuts out at the same age, although a 69-year-old client renewing cover will be accepted.
Suretravel sells its annual scheme to older clients, but they pay double premium at 65 and treble premiums when they reach 70.
Competition is the main reason for the swing away from loading in the single-trip insurance market. To cut out rivals, intermediaries such as Primary and Journeys Travel Insurance use it to tie agents into exclusive deals.
For instance, Primary scraps the 200% loading on clients aged 66-79 and 300% on people over 80 where there is a sole agency agreement, unless the holiday exceeds 31 days. Journeys Travel's loading kicks in at age 70.
"We do this to try to stop agents cherry-picking - using our policy for their older clients because it is competitive but giving other business to another company," said Primary marketing database manager Simon Redgrove.
The facts about older travellers' claims show why insurers are less than keen about covering senior citizens.
GE Capital Travel Insurance Services head of sales and marketing Lisa Garton said people aged over 50 are three times more likely to make a claim, while Ketteridge claims statistics prove a higher risk among clients aged 65-70.
Ketteridge general sales manager Doug Weston said: "I believe we should see loading for people from age 65 provided it is not over the top.
"That is not penalising older people; the bulk of cancellation and medical claims comes from that age group."
Most intermediaries agree with Weston that age loading is fair as it means the entire higher claims risk from older travellers is not shared by all policy holders.
"We believe it is grossly unfair on younger people to subsidise older travellers," said Inter Assurance managing director Andrew Blowers.
Even with loading, some risk is spread across all premiums. "To cover the risk entirely, older people would have to pay four times the usual premium," said Garton.
She forecasts a time when premiums for all clients are calculated depending on their age, from 16 upwards, so each pays a different rate.
However, when that happens depends on how fast agents move forward technologically, and Garton predicts it won't happen for at least 10 years.
Journeys managing director Patrick Chong said age loading for worldwide travel will return as the market hardens - that is, when insurers decide they have lost too much and put up premiums. That will not be welcomed by the agents.
"They don't like age loading as they want policies to be straightforward and they don't like to ask clients their age," said JS Insurance Management managing director Steve King.
AON's travel insurance services managing director James Beagrie said agents might stop a swing back to loading.
"The decision is no longer insurance-driven, but client-driven. Agents are tuned to the market and know what they can sell," he added.
Ketteridge: Holidayguard Select policy doubles premium for clients aged over 75 travelling worldwide for longer than 18 days. Takes 25-day rate from £22 to £44. Double premium kicks in at age 70 on Holiday-guard Premier. Takes 25-day rate from £23.50 to £47.
ABC Travel Extras: worldwide premium doubles for clients 70-plus. Sees 17-day US/Canada rate rise from £23.71 to £47.42. Age limit for annual policy is 69.
Inter Assurance: 400% loading for clients aged 70-74. Takes 17-day Europe net rate on Super Plus Cover from £9.48 to £47.40 plus Insurance Premium Tax.
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