Nearly every week, we will see press releases going along the lines of "Insurer ABC partnered with digital player XYZ to unlock, through technology, a unique innovative distribution channel…". While some of those partnerships are truly innovative, it is important to remember that Airlines and Online Travel Agents have been distributing travel insurance products through API integrations over the last 20 years.
The travel insurance B2B2C distribution model is now a very efficient, mature and sizable market. Based on a limited industry benchmark including 100+ airlines, online travel agencies, cruises and train operators, we have assessed this market to be worth approximately USD 5-6B
Infographic: Travel Insurance B2B2C Airline Distribution. The rise of digital powerhouses in all verticals (ecommerce, food delivery, ride share, chat, digital bank) unlock insurance distribution opportunities like never before. The sheer volume of data registered and analysed in real time by those businesses allows a much deeper understanding of consumers behaviours, expectations and risk profiles.
This new insight is exactly what Insurers need to leverage on in order to design tailor-made insurance products. These products should ideally be partner specific, relevant to the end consumer (at the moment of purchase) and distributed through seamless integrations in the partner ecosystem through multiple touch points.
Insurers should have a specialized salesforce dedicated and accountable for partnership establishment and management. These teams should cover targeted markets and their specific requirements, understand potential partners' needs and expectations, and feed a pipeline of potential deals. This capability also includes managing efficiently coordinated commercial efforts, most of the time at a regional and global level.
Automation is key in B2B2C digital distribution partnerships
and this can be achieved by integrating with the IT systems and operations of the partner. This could include developing turnkey tools for the partner's salesforce (agent portals, white label), or deploying APIs and plug and play solutions to integrate directly into the partner'senvironment.
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Good partnerships are measured by the ability to provide seamless customer experiences. Insurers therefore need to adapt the customer journey to the nature of the business in order to maximise conversion. This requires an in-depth understanding of the nature of the partner's customers and products in order to devise the appropriate customer experience.
In most cases insurance is only an add-on to the partner's core product. Each partner will require their own version that is localized to consumer expectations. Insurers should be able to rapidly generate new products for new partners. Additionally, underwriters need to be able to adapt product characteristics to each partner's requirements globally. This not only requires strong pricing and underwriting capabilities, but also flexible IT systems that allow for speedy tailoring of product components with a rapid time to market.
"At Allianz Partners, we are undertaking a profound transformation which will enable us to better anticipate the constntly evolving needs of our customers and to understand the next generations' solutions in a transversal organization. This year's results validate our ambition to build an agile, fast and efficient partnership with our clients"
Allianz Partners announced in 2017 that its travel insurance business unit experienced an exceptional growth in America and Europe. They reported an increase of 22% to reach €2.024 billion in revenue. This performance was credited to major partnerships across the globe:
AXA Partners is a unit dedicated to developing the partnership business of AXA globally. It combines two existing business entities in charge of global partnerships: AXA Assistance and AXA Creditor (including the newly acquired business of Genworth Lifestyle Protection Insurance). These business units generated approximately €3 BN in revenue in 2014.4
View AXA's Partners
"AXA Partners is expected to play a key role in the design and deployment of insurance and associated services required to strengthen the role of insurers. We are in fact preparing to accelerate the implementation of the AXA strategy that consists in going from 'payer to partner', as we deploy our innovative solutions to the largest number, and mainly in the sector of healthcare, mobility, the collaborative economy, and in support of our SME clients."
"We have a dual engine strategy with our business … without the technology, we wouldn't be able to have all of this — dynamic pricing, product approach. Without the actual business of insurance, our system wouldn't be so convincing."
Ping An, Tencent and Alibaba co-launched Zhong An, China's first online insurance company. Aimed at reshaping traditional insurance, Zhong An uses an online model that is based on lower operating and distribution costs. This coupled with big data and analytics support helps make the internet ecosystem more desirable.
Oliver Wyman: Insurance Inside – The new Era of B2B2C insurance
CB Insights: Zhong An Teardown
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