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EU warning on pre-existing conditions should prompt travel insurance reform

By Lara Suttie  |  December 16, 2019

While the exclusion of pre-existing medical conditions in travel insurance policies has long been standard practice in many European countries, there is increasing regulatory pressure from the European Union (EU) to reform.

The European Insurance and Occupational Pensions Authority (EIOPA), the EU’s insurance regulatory institution, has recently issued a warning to the travel insurance industry to address a number of consumer protection issues – including those relating to pre-existing conditions – that it intends to support through intensified supervisory scrutiny and actions.

EIOPA’s warning follows a recent report, Consumer Protection Issues in Travel Insurance: A Thematic Review, that revealed that many business models used by travel insurance distributors can have a detrimental impact on consumers, whereby the insurance products sold do not meet their requirements, there are unclear and conflicting terms and conditions, or claims are denied.

In fact, EIOPA found that around 70 per cent of travel insurers in Europe currently exclude pre-existing medical conditions. The report also shows that 72 per cent of travel insurers do not use medical screening before contracting a travel insurance policy.

EIOPA suggests medical screening is more common at the claims stage to identify whether the incident is the result of a pre-existing medical condition, which could potentially be used as a basis for dismissing the claim. Excluding cover at the claims stage often leads to customers dissatisfied with both the product and their insurer.

EIOPA states that ‘insurers should inform customers about the exclusion of the pre-existing medical conditions from the travel insurance policy and ideally, they would advise the consumer on the options available to buy adequate and appropriate travel insurance based on their situation’.

Ensuring that insurance products are consistent with the needs of customers and presented with objectivity, honesty and fairness are all requirements of EIOPA’s Insurance Distribution Directive (IDD). The report sets out several expectations on the practical implementation of IDD to ensure that insurance is always distributed in the best interests of the customer.

The relevant regulatory authorities of EU member states – also known as National Competent Authorities (NCAs) – will be more closely monitoring insurance business models and can exercise their own investigatory powers or even choose to impose sanctions for failure to comply with the rules set by IDD.

With this increasing regulatory pressure in mind, the need to underwrite travel insurance policies more inclusively for customers with pre-existing medical conditions has never been greater.

Change on the horizon?

Because pre-existing medical conditions are usually excluded from cover, this can often lead to complicated, confrontational and drawn-out claims processes.

Following the EIOPA report, there is an increasing pressure for insurance companies to underwrite more inclusively of customers with pre-existing medical conditions, ensuring all their healthcare needs are covered abroad – preferably in a quick and efficient manner. Making sure customers fully understand their travel insurance policy terms is critical.

Generally speaking, medical screenings can be an effective method of ensuring that the needs of the consumer are fully respected; however, many of these processes are unnecessarily lengthy – often requiring comprehensive medical reports, supporting evidence from doctors or specialists and further clarifications from the customer. Many times, once all these steps have been completed, the risks presented by that customer’s pre-existing conditions are still excluded.

To aid in addressing some of these shortcomings, Verisk has helped automate medical underwriting through various tools that guide customers through a series of simple questions about their pre-existing medical conditions; the answers are then used to generate a relative risk score that can be used to efficiently underwrite policies at the point of sale.

Our Travel Black Box has helped global insurers automate the assessment of the risk presented by pre-existing conditions since 2000, and more than 21 million risk assessments are now carried out each year.

Regulatory changes across Europe are prompting travel insurers to re-evaluate how they underwrite their policies to be more inclusive of those with pre-existing conditions. Why not be a part of that change?


Lara Suttie is Director of Business Development at Verisk. She can be reached at lara.suttie@verisk.com.