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Blog: Will Brexit fundamentally change the dynamics of travel insurance?


The UK's withdrawal from the European Union could leave many travellers with pre-existing medical conditions struggling to get cover to replace that provided by their European Health Insurance Cards. Aquarium Software's product marketing director Mark Colonnese suggests a solution whereby insurers bid against each other to cover conditions at a reasonable, competitive cost with the government underwriting any excess risk.

Aquarium director Mark Colonnese
Mark Colonnese, product marketing director, Aquarium Software

Political turmoil in the UK continued to grow after the fallout from the 2016 Brexit vote. A new deadline for the UK to leave the European Union on 31 October 2019 seems as politically essential as it is practically unachievable.

The desire to avoid a chaotic exit goes part of the way to explaining why, three years after the referendum took place, the UK has still not left the EU. However, it seems that the political landscape may mean this is exactly what happens at the end of October. 

The immediate concerns

It’s likely that, if Britain simply drops out of the EU, the most immediate issues will not only relate to trade. As well as questions over what happens to mobile phone roaming charges and whether UK airlines can fly over mainland EU, a third immediate issue will be: are British citizens still covered for medical issues under the European Health Insurance Card?

In February, the UK Government made it clear that, in the event of a no deal Brexit, EHICs would not be valid. Anyone travelling to the EU would need to buy travel insurance instead. In many cases this will be easier said than done. One of the great benefits of EHIC is that it covers pre-existing medical conditions - including chronic conditions - as well as emergency care. It is unlikely that the average travel insurer will be generous enough to cover the risk associated with these conditions with no adjustment in premium to reflect the potential indemnity risk.

An issue of habit

Equally concerning will be the questions of whose responsibility it will be to tell people they will no longer be covered by EHIC and need to buy insurance, particularly if Brexit deal negotiations go to the last minute but then break down. 

The Office of National Statistics provides information on Britons’ travel abroad. In 2017, Britons made almost 50 million visits outside of the UK. Of the ten most popular countries for Britons to travel to, only one is outside the EU (the US). In total, less than 7% of trips abroad were outside the EU

This leads to a further cultural issue. There is likely to be a very large number of people that have relied on EHIC to provide medical cover abroad and have either purchased very basic travel insurance or not bothered at all. 

Solving a major headache

The potential withdrawal of EHIC provision increases the likelihood that, come November, Britons travelling abroad will either have no access to medical assistance in the EU or could be clocking up huge unexpected medical bills. This is exacerbated by the fact that, for many schools, half term does not end until November 2019. It’s entirely conceivable that families could travel to the EU with EHIC cover that ends during their holiday.

Within the timescales only radical action can mitigate this. I would propose a government sponsored website, backed by major travel insurers, enabling anyone travelling to the EU after 31 October to submit a list of pre-existing conditions that would be covered under EHIC. Insurers could then bid against each other to cover conditions at a reasonable, competitive cost, with the government underwriting any excess risk. 

Backed by a publicity campaign to current EHIC users, this could provide an effective solution for consumers, delivering ongoing cover at existing levels. Insurers would have the opportunity to win new business, with the assurance of government backing should anything go wrong. The government would avoid the risk of its citizens being in jeopardy abroad without having to offer everyone blanket cover for every eventuality, which is likely to be the case if nothing changes.

The technology, incidentally, is available today. Companies are already using digital to enable customers to list pre-existing conditions; insurers can then quickly feedback to customers whether these are relevant to cover or not, providing reassurance and choice to the consumer. 

There are many complex consequences to the decision to leave the EU. The consequences of EHIC withdrawal is only one, but it is both important and fixable. 

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