“It’s no secret that air travel changed this year in ways we have never seen before, but people are still flying, and they will continue to fly.”
Chuck Thackston, Managing Director of Data Science and Research, Airlines Reporting Corporation – leading business solutions provider for air travel intelligence and commerce in the travel industry.
As travel is here to stay and we are still in COVID times, consumers would want to reduce as much uncertainty and as many risks as possible to optimize their travel experience by leveraging upon flexibility in travel bookings and insurance to recoup as much losses and expenses if the unexpected happens.
We’d recently published the 2022 Travel Insurance Outlook Whitepaper – highlighting insights from consumer questionnaires done with travelers and interviews conducted with executives coming from insurers, airlines, OTAs and other travel solution providers to understand sentiments towards the travel insurance market in the new normal.
A Generali Global Assistance Holiday/2021 Travel Sentiment Survey showed that about 58% of Americans are more likely to buy travel insurance now compared to their willingness to buy it pre-COVID. Previously, the standard travel insurance product did not cover the pandemic, but we are seeing more and more variants of what we thought as only one type of travel insurance springing up as a result of COVID-19.
The article delves into global insurer perspectives on how the travel insurance product is evolving with the pandemic, and travel insurance distribution strategy for the remaining travel players.
The last two years saw an inevitable move towards domestic and localized travel within the EU, especially with the lockdown and constantly-changing travel restrictions. Moving forward in 2022, we are starting to see more stability and certainty in the travel regulations as the peak of COVID-19 cases subsides, as well as greater preparedness by governments and travelers themselves to manage the outbreaks.
That said, more are likely to travel internationally. Within the EU, on average more than half (49% in France, 52% in Italy; 74% in the UK) of those we surveyed would get travel insurance for their international vacation in 2022. France stood out in the EU research we’d done for one reason that the demand for domestic trips is higher in this market compared to pre-COVID levels, with increasing travel destinations to campsites which is unique to the region.
Whereas for local and regional travels, travelers may still accept not getting any travel insurance before embarking on their travels. Within the UK, 47% of Gen Z responders aged 18-24 indicated willingness to travel within the region or domestically without purchasing travel insurance.
READ MORE: Ancileo Blog – A Break in COVID-19 Clouds: Travelling Enabled by Insurance
Across the markets, we’d noticed that competitive pricing goes hand in hand with personalization. Insurers are working to ensure that their products are tailored more to the customer’s personal and travel profiles, as well as offering diverse products to tap on new markets. Also, as travel requirements vary from country to country (and region to region), we will be seeing more dynamic pricing and packages for customers.
Collinson posits that net rating in the coming months will be a challenge with changing travel patterns and the lack of reliable sales or claims data from the last two years. Pandemic coverage is here to stay beyond this period, and the challenge for insurers is to refine the COVID coverage for travel insurance from time to time. Henceforth, the willingness and the buy-in of reinsurance markets to support insurers also becomes key.
As we speak of data, technology implementation is at the heart of effectively predicting what products are relevant for every given customer. Rather than only tapping on the platforms of their Online Travel Agencies (OTAs) counterparts, more insurers are keeping up with the tech game on their own websites. For instance, AXA Italy will be launching its Customer Portal this year which will be a stand-alone or partner-integrated space where customers can access all digital tools, download documents, access travel information, arrange a tele or video consultation and submit and track the progress of claims.
It’s enough of a chore for your customers to evaluate a travel insurance policy based on the terms and conditions. Don’t make the purchase and post-purchase process anymore tedious for them!
Talk to your partners and gather more brains together to look at how to improve your overall customer experience (CX). How to best integrate the travel insurance purchase journey seamlessly within their ecosystems? On your end of the deal, how can insurers also leverage your own platforms to offer customers with your partner’s offerings?
Swiss re, for example, has a scalable, easy-to-use platform to build and manage travel insurance covers. Their platform enables real-time adjustment of triggers and payouts, giving their customers all the flexibility and transparency they need to boost performance and steer portfolios.
Swiss Re: Flight delays – get compensation for the price of a coffee
Also keep in mind not to sacrifice security for simplicity. It’s not necessarily a give-and-take situation. With the example of Swiss re, flight delays are verified by a trusted third party, and claims payments are automatically made after the delays have been confirmed. Customers save the hassle to claim losses and you keep your customers safe through a third-party verification.
READ MORE: Ancileo Blog – Building Better Security For Insurance Through Blockchain-Insurance Partnerships
Collaboration brings the best talent, tools and technology together. As it’s been mentioned, collaborating with airlines, travel agencies and other travel players would enable insurers to provide a convenient and seamless insurance purchase journey, and deliver greater value beyond a travel insurance purchase to customers and business partners.
With a particular focus on insurer-airline partnerships, Bangkok Airways has put forward that as an outcome of their collaboration with their insurer partner, it has enabled them to implement flexibility for their customers to change or maintain the insurance coverage period following their flight without incurring additional fees.
The potential to create more value for your customers is endless with the partnerships. For insurers, this means thinking out of the box, aka beyond the nuts and bolts of the policy terms, to explore ways to leverage on the loyalty and reward programmes of your partners.
Consider miles, elite status benefits and credit card benefits as potential currencies to make it extra attractive for their customers to purchase insurance with you. Airline members also have a strong affinity to their miles, and that can be tapped upon in terms of rewarding your customers with miles when they get their policies with you.
Of course this isn’t limited to only travel insurances. A customer’s needs are all-encompassing, so that means the insurer can cross-sell different types of insurance on their partner’s platform. That being said, this has implications on collaboration between internal departments and stakeholders to better synergise their offering for the customer.
Last December 2021, Ancileo sent out a survey questionnaire to 4,800 participants from 12 markets (Canada, United States, United Kingdom, Italy, Germany, France, United Arab Emirates, Singapore, Thailand, Indonesia, Japan and Australia) to understand how consumer sentiments towards travel insurance have changed in the endemic.
We also interviewed executives coming from Airlines, OTAs and travel solution providers to find out the key features of travel insurance during this period and what this means for insurance distributors and insurers in 2022.
The 2022 Travel Insurance Outlook is a 180+ pages report, encompassing the following sections:
Download the Global Travel Insurance Market Research 2022 for FREE