Insurance Industry: Travel Premiums

Lord Blunkett Excerpts

Tuesday 28th June 2022 Lords Chamber

Asked by

[Lord Blunkett]

To ask Her Majesty’s Government what discussions they have had with representatives of the insurance industry regarding the use of age as a trigger for substantial increases in premiums for travel and other related cover.

[Lord Blunkett (Lab)]

My condolences too for a very great woman. I beg leave to ask the Question standing in my name on the Order Paper.

[Baroness Penn (Con)]

The Government continue to work closely with insurers and the independent regulator to ensure that everyone has access to suitable and affordable insurance. The Financial Conduct Authority requires firms offering retail travel insurance to signpost consumers to a directory of specialist providers if they are declined cover, offered cover with an exclusion or charged a significantly higher premium for the medical coverage element.

[Lord Blunkett (Lab)]

My Lords, in March 2020 there was an outburst of gross discrimination against people on age grounds that nearly locked people in their own dwellings because they had reached the age of 70. Perhaps the Minister can go back to the Association of British Insurers, which produced a review in 2018, and point out that many of its members are raising exponentially the fees required for cover for people over 70, 75 and 80. Given that only 7% of over-65s claim in any given year, surely it is possible for us to ensure that people who are living longer, fitter and able to travel can do so and have the cover necessary to make that possible.

[Baroness Penn (Con)]

My Lords, travel insurance is fundamentally designed to cover medical expenses, where age can be a risk factor. The Government do not intend to intervene in commercial decisions made by insurers, as this could damage competition in the market. The new rules that I referred to in my Answer came into place in April 2021—after the example the noble Lord gave. They mean that firms need to signpost consumers to a directory of specialist providers if the medical premium they are being charged is significantly higher than normal. The Government continue to want to promote financial inclusion, and have the Financial Inclusion Policy Forum in place to ensure that they consider all questions around financial inclusion.