Phil Carr, director of sales at Rock Insurance Group, said if the trend of travellers pursuing bogus claims against agents, tour operators and hoteliers continued, it could not only see travel firms increase their prices to offset payouts but impact the rights of genuinely ill travellers and push up premiums on holiday insurance.
He said that Spanish hotel owners suggested the surge of fraudulent claims had cost their industry more than £40 million in the last 18 months – with a reported increase in claims of 700% during the same time period.
Carr warned that false claims typically account for 15-18% of the insurance premium and that increases in fraudulent claims against hoteliers would eventually “cascade down to the consumer”.
He predicted that as a result, a family of four could potentially be looking at an all-inclusive holiday price increase of between 10-15% yearly.
“If this trend continues, not only will it impact the claims of the genuinely ill holidaymaker - with some resorts in Spain threatening to stop selling over the counter diarrhoea and gastric related preventatives - but as costs of travel continue to rise across Europe in the wake of Brexit, we could potentially see the travel sector having to increase costs further with optional add-ons like insurance could see travellers significantly under protected for their trip and this is a concern,” Carr said.
“The travel and tourism market has seen a large increase in all-inclusive holidays in recent years, with issues like Brexit playing a significant role in UK holidaymakers looking for sustainable budget holidays, as the cost of traveling abroad continues to rise.
“However, along with this boom in the budget sector has come a growing trend in fraudulent claims against all-inclusive holiday providers, specifically claims for gastric type illnesses, such as food poisoning, as holidaymakers try to claim back money on their travels.
He added: “The issue with such fraudulent sickness claims, is that they are very difficult to prove. Most hoteliers and insurance providers will typically make a payment if the customer has received medical advice and has a valid prescription. However, the true cost of these medical claims can vary significantly and the sheer scale of claims will undoubtedly have an adverse impact on claim inflation moving forward.”
