Exclusive: Travel insurer says sales soar on Zika fears

Mon Feb 1, 2016 9:29pm EST
 
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By Jeffrey Dastin

NEW YORK (Reuters) - Travel insurance sales for trips to Latin America have surged as vacationers consider scrapping their plans to avoid the rapidly spreading Zika virus, one of the top U.S. providers, RoamRight, told Reuters on Monday.

The Maryland-based company, part of insurer Arch Capital Group Ltd ACGL.O, said revenue jumped 81 percent in January from a year ago for its "Cancel For Any Reason" policy covering trips to Zika-impacted areas in the Americas.

The rise provides an early insight into how traveler patterns are changing because of the mosquito-borne virus, even as airlines and hotel chains say it is too soon to tell whether Zika has dented bookings.

The World Health Organization on Monday called the virus, linked to thousands of birth defects in Brazil, an international health emergency that could infect as many as 4 million people in the Americas.

"We see that kind of growth when there is a terrorist attack or some other event that precipitates people thinking about protecting their travel costs," said Linda Fallon, head of RoamRight and senior vice president of travel for the group's Arch Insurance Company division.

RoamRight, ranked third by sales in 2015 on travel insurance comparison site Squaremouth, declined comment on how the boost would impact its profitability because it does not know how many customers will claim refunds and therefore what losses it will incur. For this reason, it also was too early to consider whether to charge customers more, Fallon added.

Parent Arch Capital does not disclose RoamRight's total sales but reported group revenue of $932.6 million and net income of $64 million in the third quarter of 2015.

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A LAN Airlines plane lands at Santiago International Airport, Chile, January 27, 2016.  REUTERS/Ivan Alvarado