Tourism

OPINION: 9 travel insurance trends to spot in 2020

Ben Webster

Ben Webster

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.

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

Boeing: Judge orders pilots suing manufacturer over 737 MAX to reveal their names

by Christian Fleetwood

Pilots suing Boeing over lost wages have been given an ultimatum: reveal their names or withdraw the case.

Share

CommentComments

Travel Agents

Failed travel agency issued customers fake plane tickets before going under

Yet another travel agency has filed for liquidation, this time after issuing customers with fake plane tickets.

Share

CommentComments

Aviation

Investigation underway after flight attendant falls from parked plane

by Christian Fleetwood

A flight attendant has been seriously injured after falling out the door of a parked aircraft.

Share

CommentComments

Destinations

Cue the wanderlust: These are the world’s most Instagrammed forests

In an era where experiences, purpose and sustainability are driving travel, visiting the world’s forests is a great way to encourage travellers to leave no trace.

Share

CommentComments

Tourism

Aussie airports on alert for deadly coronavirus as US confirms its first case

by Ali Coulton

Health authorities are working with airports to quell the risk of a pandemic of the deadly novel coronavirus.

Share

CommentComments

Technology

Trivago licks its wounds after court loss, as industry bodies applaud ruling

by Huntley Mitchell

Trivago has responded to the Federal Court’s ruling that it misled consumers about hotel room rates on its website and in its TV ads. Find out what the OTA had to say here.

Share

CommentComments

Wholesalers

Lonely Planet launches its first tour range

by Ali Coulton

The iconic travel publisher has teamed up with Intrepid Travel to “bring its guide books to life”. We’re not sure if that means the tours will be led by giant talking books.

Share

CommentComments

Midweek Interview

Midweek Interview with Collette’s Lexy Wildash

This week, Collette’s marketing specialist gave us tips on how to get the perfect money shot at the Trevi Fountain without getting mobbed by crowds.

Share

CommentComments

Cruise

Cruise Wrap: Silversea’s new grand voyage, Hurtigruten launches bushfire appeal, Crystal’s new river deployments + MORE!

Not spending your Wednesday cruising through the Mediterranean? Perusing this week’s Cruise Wrap is the next best thing. Or at least that’s what we tell ourselves.

Share

CommentComments

Destinations

The easiest (and most enjoyable) way to become a Phuket expert

by Sponsored by the Tourism Authority of Thailand

Are you an agent looking to sharpen your selling skills for Thailand’s largest island without having to read boring books or complete online training modules? Herein lies the solution.

Share

CommentComments

Aviation

Aviation Wrap: Emirates pledges bushfire support, Qantas returns to Byron Bay + MORE!

This week’s Aviation Wrap is brought to you by Travel Weekly’s roving reporter, who has decided to wear compression socks with thongs to the office today. It’s not a good look.

Share

CommentComments

Aviation

Virgin strengthens ANA codeshare agreement ahead of Tokyo Olympics

Sadly though, we won’t get to witness Sir Richard Branson ride a baggage carousel with pretend giant sushi in celebration of this news.

Share

CommentComments