Insurance Update Issue 53

Winter 2004 CSANews Issue 53  |  Posted date : May 16, 2007.Back to list

The 2004-2005 snowbird travel season is starting out with the roar of a lion. Medipac has attracted almost 1,000 new clients this year who have primarily migrated from other insurance plans. We are also seeing a few new "baby-boomer" snowbirds beginning to enter the market and some first-time insurance buyers who had previously been travelling without insurance. The last group is obviously starting to wake up to the realities, and expense, of seeking medical care in other countries.

On the other side of the coin, claims are also increasing dramatically and we suspect (and hope) that this is a minor aberration in the early statistics. The number of snowbirds hospitalized, at this point in the season, is up by 60 per cent over last year; the number seeking doctor's care has also increased by about 15 per cent. We have always found that our first year insurance purchasers tend to have more claims and this could account for some of the increased claim activity. This is actually common sense when you understand that some snowbirds, who can only marginally afford insurance, tend to buy only when they think they will have a claim.

But there is some great news in the Canadian dollar, as I am sure every travelling Canadian knows. The dollar is hovering around the $0.85 mark, compared to the U.S. dollar, and many economists expect it to move even higher. Some are even cautiously talking about the possibilities of parity, which means one U.S. dollar equals one Canadian dollar. If you travel to the United States, and many of us do, our purchasing power has dramatically increased. Those bargains in the U.S. are now super bargains and the cost of living in the U.S. has substantially improved for the better. Since the devaluation of the U.S. dollar is a U.S. phenomenon, it also means that the cost of travel to Europe and many other countries has increased, as their currencies have strengthened.

If the Canadian dollar remains strong, this will also have a beneficial effect on travel insurance prices. Medipac is already looking at ways to reward our long-term customers should claims stabilize at normal levels and the Canadian dollar stay strong throughout our heavy claims paying period. Our Claims Free Discount has already resulted in half a million dollars in premium savings for snowbirds, and these savings are increasing every day. We have also passed on large discounts for Federal Superannuates by increasing our premium credits for their government program. To my knowledge, Medipac is still the only travel insurance company to send cheques back to their clients and we will continue to look for ways to help you and to make our state-of-the-art travel insurance more affordable.

Let us all hope that this year's travel season "goes out like a lamb" with low claims and low U.S. medical inflation. And I also look forward to a buck actually being worth a buck.