Tourism players have been on the edge since the travel sector has been stalled by the endemic. How are they spurring innovation, in the regard of technology solutions and revenue models, to lift tourism out of COVID-19 and beyond?
Ancileo recently published the 2022 Travel Insurance Whitepaper – a global study done on 4,800 travel consumers and in-depth interviews with travel experts to understand sentiments towards the travel insurance market in the new normal.
The article summarizes 5 key insights into travel behavior and insurance trends gathered from interviews with industry experts including insurers, airlines, online travel agencies (OTAs) and travel solution providers.
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Convenience repeatedly comes up as the No. 1 priority in the consumer decision-making process when it comes to travel insurance purchase. Alongside heightened risk and safety awareness due to the pandemic, airlines are improving the way ancillary products are offered across digital touch points.
Whether it’s part of the flight booking or during the post-booking phase, how the customer experiences every stage of the buying journey can make or break a purchase. That being said, you want to make it as convenient as possible for them to be able to tailor their journey at a click of their mouse, and even better when it’s on any device (URLs or Apps), anywhere they are at.
Both insurers and other travel players have been pumping in efforts and funding to improve the features on their digital platforms, as well as their respective product offerings, to cater to the changing needs of travel insurance customers.
Swiss Re’s scalable, easy-to-use platform to build and manage travel insurance covers. The app enables real-time adjustment of triggers and payouts.
(Source: Survey statistic from 2022 Travel Insurance Whitepaper, Ancileo, 2022)
Swiss Re, for example, found that combining data, underwriting expertise and global insights, together with their partners’ capabilities, platforms, and customer knowledge, has enabled them to accelerate idea validation and product prototyping. This has allowed them to avail their offerings in the market much earlier and faster than the rest, thereby shortening the overall product development cycle.
Think of customer-centricity beyond the lens of Apps and Tech. Our customers have dynamic needs, beyond what they want to only buy from us. That said, Japan-based insurance provider, MSIG, believes that capitalizing upon innovative reward programmes such as the usage of air miles for purchase of insurance policies to enhance their customer experience.
In the Singapore market, regardless of income levels, travelers are influenced by price discount on travel insurance plan
(Source: Survey statistic from 2022 Travel Insurance Whitepaper – Singapore Analysis, Ancileo, 2022)
Uncertainties are at all-time high in times like these. Anytime there is a spike in the number of cases or an emergence of another variant, travel plans may be delayed or canceled. We have noticed that airlines cope with this by specifying a period for customers until when airlines allow and facilitate free changes to their bookings.
Of course this is complemented with airlines providing customers the most updated information that they make as prominent and accessible as possible about the travel procedures and country-specific requirements on travelers (e.g. COVID hub on Etihad’s website).
Typical travel journey during COVID-19 times
(Source: Travelling Out of Singapore during the Pandemic? Here’s a Guide to VTLs and COVID-19 Swab Tests, Homage)
For the customer, paperwork and waiting time tend to be the most painful parts during COVID-19 times. Supersede their expectations some more by making it as easy as possible for your customers to send in their relevant documentation prior to arriving at the airport. Once they have been verified to fly, they can arrive at the airport confident that they have fulfilled all the requirements necessary for their trip
Turning COVID-19 from a crisis to an opportunity, there is no better time for travel insurance growth than today (See: A Break in COVID-19 Clouds: Travelling Enabled by Insurance). The need for travel insurance has been mandated by circumstances and even by regulators as one of the travel requirements.
Marketing via hero banners and championing valuable and affordable travel insurance offerings, Bangkok Airways hope to use this pandemic as an opportunity to educate passengers and promote travel insurance.
Czech Republic-based OTA, Kiwi.com, posits that personalization goes hand in hand with competitive and dynamic pricing schemes. Technology implementation enables more clarity on what each product addresses, thereby effectively predicting what products are relevant for every customer profile.
Mark Ross-Smith, CEO and Co-Founder of StatusMatch.com, says “Travelers hold a greater affinity to their miles balances than they ever will for an insurance policy.” Therefore, the challenge for insurance partners is to explore ways to leverage on airline loyalty programmes, specifically looking at translating frequent flyer currency – miles, elite status benefits and co-brand credit card benefits – into the value of travel insurance plans to lock in customer purchase behavior.
Also, value creation for the customer is at the heart of partnerships. For airlines, take your focus off partnering only in the regard of travel insurance purchase… The partnership potential of loyalty currency is endless! Capitalize on your strengths, and sell this currency to other partners.
In the area of airline-insurer partnerships in health and wellness, we want to cite a case study by Switzerland-based loyalty solutions provider, Loylogic, who has a wealth of experience working with the world’s best airlines. Health and wellness apps have been a big thing in the insurance industry for sometime now. Upon the successful purchase of say travel insurance, the customer can be directed to a wellbeing app by the insurer. While acknowledging that it was the airline who helped to acquire this new customer in the first place, prizes and offers in the health app could be related to the airline. For example, winning 100.000 airline miles, receiving 50% discount coupons on certain flight destinations, winning free flights, etc.
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