OPINION: 9 travel insurance trends to spot in 2020

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What’s in store for travel insurance this year? Here are nine key trends to look out for…

1. Increased regulation on embedded cover

During the recent royal commission into the financial services industry, add-on and embedded insurance was (rightly) targeted and large institutions are already starting to make reparations.

Travel insurers are waiting for the regulatory changes that are bound to follow. This will impact the way insurance is advertised and sold through third parties such as banks, airlines, travel agents, and online aggregators.

2. Tapping into affiliates

The retail market is saturated with competition; diluting reach and drowning traditional share of voice. As with all things in marketing today, influencers, interest-groups, and niche brands with fiercely loyal followings become fertile ground for ‘putting in a good word’ and gaining brand awareness.

But in 2020, insurers are not merely advertising or seeking endorsement – they’re recruiting ambassadors to sell on their behalf. It’s a win-win, with great earning potential for the affiliate, and new routes to market for the insurer. The trick in all of this will be the ease with which insurers allow their affiliates to sign up, sell, and see money in the bank.

3. Outsourcing everything

Even travel insurers need help selling travel insurance. It’s hard to keep up in a digital world, especially for brands who started out analogue. In 2020, mainstream insurance companies will continue to outsource their tech, as is prevalent in all traditional industries.

Policy administration, the administration of wholesale and retail pricing, fine-grain pricing catalogues, yield optimisation, fine-grain loss ratio control, modular purchase paths, and live chat – these are just some of the areas in which insurance tech specialists have the lead.

In 2020, the door is open for the big guns to capitalise on these gains. The insurance tech’s SaaS solutions, service level agreements and APIs will be in demand.

4. Feeling fine grain

In 2020, no one likes to be pigeon-holed. A highly individuated consumer demands products that speak to her needs. A focus on fine-grain pricing, combined with sophisticated product cataloguing, holds the key to bespoke travel insurance products and bundles.

With gains to be made, customer-centric insurers will prioritise pricing permutations in their product design. Agile tech spells the difference between theorising and delivering.

5. Parametric insurance

Don’t be put off by the insurance jargon. In 2020, parametric insurance is here to stay and it’s good for the customer. It covers the probability of a predefined event happening instead of indemnifying actual loss incurred.

In the case of travel insurance, this could be a specified cash payout in the event that your flight is cancelled. The good news for both the customer and the insurer is that the status of the flight is binary (it’s either cancelled or not cancelled).

There’s no grey area when it comes to claiming the benefit and the cash payout is pre-defined, so the customer is aware of what they’re entitled to receive.

6. BYO cover

Build-your-own/customised cover is something the industry has been flirting with for years. The concept has taken root in health insurance, and now we see it crossing over in earnest to travel.

Beyond the tech, enabling customers to seriously tailor their cover, and do so appropriately, relies on customers understanding what they need. Brands that succeed in offering just the right amount of options, plans and extras while equipping customers to access digestible policy information, buy fast and avoid under-insurance, will emerge victorious.

7. Smarter aggregators

The large price and insurance aggregators in Australia are just getting started. As they grow, the brand awareness for aggregators and their market share will lead to good outcomes for the customer in the form of increased competition.

Insurers, on the other hand, wary of what occurred in the UK market, are concerned about over-delivering value to customers and avoiding a cut-throat race to the bottom on price. Communicating and delivering this value to customers is key to the success of distribution through aggregators, and the smart players are beginning to make changes in this direction.

8. Instant claims… or close to it

There are three key factors that have led to the ability of insurers to process travel claims in just a few minutes.

Travellers now take their mobile devices wherever they go, and this is good news when it comes time to claim.

Insurers have also invested heavily in reducing the friction in the claims process to ensure customers get the best service.

Global payments services such as Airwallex, Transferwise and the advent of NPP here in Australia enable rapid transfer of funds directly to the customer’s account.

The future of these claims is through advanced machine learning and artificial intelligence engines to help insurers weed out the small amount of fraudulent claims and instantly pay customers. In 2020, the foundations for instant claims are being laid.

9. Market consolidation

Travel insurance in Australia is highly competitive and the large insurers have significant advantages over smaller players. This has led to some consolidation in the market over the recent years, including NIB acquiring the World Nomads Group and then going on to acquire QBE’s travel book, as well as Zurich purchasing Cover-More.

This trend will continue with some of the smaller players looking to exit.


Ben Webster is the founder of Insured By Us, Travel with Jane and Travel with Kit. He is also part of the founding team at InsurtechAus.

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