With new opportunities, new risks: insuring business travel in Africa
Africa’s economic boom and influx in infrastructure development and resource sector investments, all at a time when developed economies have seen stagnation, have created a distinct shift in business travel patterns, with increasing numbers visiting high-risk regions. An alarming number of organisations, however, have not upgraded their corporate travel cover accordingly.
“Visiting Lagos or Luanda comes with different risks to visiting London,” notes Daniel Andresen, security director for International SOS South Africa. “There are significant health risks, including malaria and a range of tropical diseases as well as poor roads and anarchic traffic. Then there are the risks associated with crumbling infrastructure and political instability.”
Despite the risks, a surprisingly low number of companies use corporate travel insurance, says Shanaaz Cajee, product manager for accident and health at Guardrisk Allied Products and Services. “Instead of providing cover for their business travellers, too many rely on their employees’ own insurance cover or, worse still, the very limited travel insurance provided through credit card ticket purchases.”
Many insurers provide members with access to detailed country reports, through partnership arrangements with risk management experts such as Europ Assistance and International SOS advising on local conditions and dangers, as well as necessary precautions for specific countries. On-the-ground medical and expert crisis assistance is available 24/7.
“Companies operating in high-risk locations or sending employees to these areas must develop a robust risk management programme. This requires preparation and planning,” says Dr Charl van Loggerenberg, regional medical director at International SOS. “Managing security and medical risk proactively and relying on experienced resources in the region will influence crisis outcomes.” He adds that proper preparation is now an industry standard duty of care requirement. This includes monitoring threat levels in a country, preparing employees prior to travel, and having procedures in place to react to travel-related incidents, from the routine to the unexpected.
The costs of air evacuations are high and there are many complications for the crew to manage.
Terrorism and political violence
When a travelling employee is in crisis, how rapidly and effectively an organisation reacts is critical. “Clear and robust emergency plans are effective only when underpinned with the ability to assist employees whenever and wherever they require assistance,” cautions Andresen.
The ramifications of political unrest can place employees directly or indirectly at risk, should they become stuck in a country in turmoil. For this reason, corporate travel cover should include political evacuation, Cajee explains. “Recent incidents in Egypt and Libya demonstrated the necessity of this. Even if a plane or a helicopter can’t be sent in, the cover will provide access to a local network able to evacuate trapped employees.”
The expertise of risk management professionals can be invaluable. During the 2011 uprisings in Egypt, for example, International SOS was able to locate 900 members in the region using its TravelTracker system. In total, more than 1 250 members were evacuated during the crisis period. Those who needed to stay in Egypt received medical assistance, and access to food and information updates from a team on the ground. “The costs of air evacuations are high and there are many complications for the crew to manage,” notes Simmy Micheli, sales manager at Travel Insurance Consultants (TIC). “These include coping with night landings on poor runways, ambush by armed gangs, and airport officials who require US Dollar bribes before allowing pilots to leave the country.” However, organisations accessing this assistance through their business travel policies bear no costs.
A further key inclusion in corporate travel cover is kidnap and wrongful arrest, Cajee adds. Aon South Africa recently reported that kidnap for ransom is increasing in Africa. “There are about 15 000 to 20 000 reported kidnappings each year, with many more unreported. The impact of a kidnap can be great; it is extremely traumatic for those involved, and can lead to significant financial losses from ransom payments, associated costs, business interruption, litigation and long-term damage to reputation.”
Medical risk considerations
In a recent analysis of data from over 4.6 million travellers to 223 countries, 23 per cent of business travellers were found to be visiting countries with medium, high and extreme health risk ratings, as rated by the recently released HealthMap 2013, published by International SOS. The HealthMap ratings provide an overview of health threats as well as the availability and quality of the local health infrastructure.
In many parts of the continent, healthcare standards are dramatically below those of developed countries, says Micheli. “For this reason, the medical insurance selected by clients needs cover options which include unlimited medical expenses.” A recent study published in the Journal of Occupational and Environmental Medicine indicates that expatriates living and working in a high medical risk country are six times more likely to be hospitalised and more than 23 times more likely to be medically evacuated than those in a low medical risk country. The authors hypothesise that a lack of local medical capability, presence of endemic disease and hazardous work contribute to this significant increase in risk.
Supporting employees going to higher-risk locations creates additional challenges for organisations. “Understanding the quality of local medical services; disease risks; vaccination requirements; food and water precautions; and how best to manage chronic conditions are all important preparation considerations,” says Van Loggerenberg. “Identifying medical risks and prioritising their corporate health agenda will help organisations better contain human and financial costs.”
In Cajee’s experience, the biggest costs incurred abroad are medical evacuation and repatriation, along with medical expenses. Insured travellers are not only covered for these costs, but insurers are usually contracted to global service providers with access to medical networks in most destinations. “If an employee has an accident while overseas, they will be provided with local medical contacts who will arrange transport or ambulances while securing admission to the nearest appropriate medical facility. This is either carried out in English or by translator,” explains Cajee. “TIC uses the services of Europ Assistance to provide expert 24-hour emergency assistance,” Micheli explains. “Members can reverse charge calls from anywhere in the world to request assistance.” “The burden of infectious diseases such as malaria, cholera, TB and HIV pose significant risks across Africa,” Van Loggerenberg says. Micheli adds the prevalence of exotic diseases such as sleeping sickness and Congo fever to this list. “Poor pre-travel advice, failure to take anti-malarial medication, a lack of control programmes and inadequate diagnostic and treatment capabilities all contribute to unwanted outcomes,” Van Loggerenberg continues. “The cost to companies of proper preparation for employees travelling to malaria hyperendemic areas, for instance, compared to expensive medical evacuations and in some cases, fatalities, is minimal.”
“Due to the prevalence of HIV/Aids and hepatitis B and C, should an employee be hospitalised and require a blood transfusion, poor healthcare standards are a serious concern,” says Micheli. “TIC is a member of the Blood Care Programme, operated by the Blood Care Foundation. The programme provides screened blood to its members in any part of the world.”
Identifying medical risks and prioritising their corporate health agenda will help organisations better contain human and financial costs.
Purchased on an annual blanket basis, corporate travel cover can be applied to all employees travelling abroad without the need to inform the provider each time an employee travels. For companies doing less frequent travel, individual business policies can be purchased when needed. Some insurers will extend cover to a spouse and dependent children accompanying the business traveller at no cost or for a nominal premium.
“There is increased construction and engineering travel as the continent develops. Firms should be aware that a regular policy will not cover injuries related to manual labour,” Micheli cautions. “Special cover can be set out for this in TIC corporate policies and a business industrial policy for once- off policy purchasers.”