Banks Cut Back on Credit Card Benefits, Insurers Step In

Australia's travel insurance sector is shifting as banks cut back on credit card benefits due to Reserve Bank of Australia (RBA) interchange fee reforms.

The RBA reduced the cap on domestic consumer credit card transactions from 0.8% to 0.3%, a decrease of more than 60%. This change will reduce issuer interchange revenue by approximately $660 million per year, according to the RBA's March 31, 2026, Conclusions Paper.

All four major Australian banks have responded with benefit reductions, leaving consumers vulnerable to coverage gaps. NAB removed international and domestic travel insurance from six cards on May 15, 2026, while Commonwealth Bank stripped insurance from several products on September 29, 2026. Westpac removed trip cancellation, travel delay, and luggage cover on October 1, 2026, and ANZ's changes take effect in stages from December 9, 2026.

Insurers are moving to capture the distribution space created by these changes through configurable, digitally delivered embedded products that do not depend on bank card economics. Allianz Partners launched its Metaportal platform, a digital tool for banking and loyalty program operators that allows customers to activate and manage cover online with optional add-ons.