IAG Loyalty, a subsidiary of International Airlines Group (IAG), has entered the UK travel insurance market with the launch of Wanda by Avios, developed in partnership with embedded insurance provider Open. The move represents a strategic diversification for IAG Loyalty, which is traditionally known for airline services and loyalty programs, and could have ripple effects for distribution models across the travel insurance sector.
The product is open to all UK residents and is available as either a single-trip or annual multi-trip policy. The annual version, Wanda Plus, carries features designed for modern travellers. These include a flexible cancellation option allowing customers to reclaim up to 70% of airfare if cancelling up to 48 hours before departure, automatic £25 payouts per traveller for delays over two hours, and even a bundled 10GB global roaming eSIM to support connectivity abroad.
For brokers, the significance lies less in the individual product features and more in how they’re being packaged and distributed. With embedded models gaining traction, IAG Loyalty is leveraging its brand recognition and Avios membership base to create a point-of-sale for travel cover. This raises questions about where brokers fit into a landscape where major consumer brands can plug insurance directly into their ecosystems – IAG’s arrival represents yet another direct brand taking business away.
The launch also comes at a time when demand for travel insurance is climbing. According to the Association of British Insurers (ABI), UK travel insurers paid out nearly £500 million in claims in 2024, with medical expenses accounting for the largest share. Affordability versus adequacy of cover remains a live debate, and brokers continue to play a key role in guiding clients through the trade-offs.
Globally, demand patterns are shifting too. In the US, travel insurance marketplace Squaremouth reported a 39% surge in searches for hurricane and severe weather policies this year, as travellers look to protect nonrefundable trip costs against increasingly volatile climate risks.
For brokers, these dynamics highlight both competitive threats and advisory opportunities. Embedded distribution may capture a growing share of retail travel cover, but the need for personalised advice - particularly for clients with complex travel plans, high-value trips, or corporate policies - remains strong.
What are your thoughts on the recent trends in the travel sector? Share your insights in the comments below.
