ITIJ 224, September 2019
Rajeev Shrivastava, CEO of VisitorsCoverage, analyses how a booming travel industry offers bountiful opportunities for insurers
Tourism is one of the fastest-growing industries in the world. According to the World Tourism and Travel Council, its contribution to the world economy was US$8.8 trillion in 2018, and it is set to multiply manifold in the future. The tourism sector has witnessed continued growth and deepening diversification, owing to sustained economic growth, higher disposable income, and digital penetration.
The term ‘wanderlust’ has been etched into the minds of people, especially millennials, who prioritise experience over tangible goods. Millennial tourism trends like ‘bizcation’ and ‘digital nomads’ have accelerated the growth of technology disruptors in the industry. With the boom of social media and the proliferation of modern technology, early adoption is the key.
The rise in travel and tourism has increased the need for travel medical insurance, and modern technology has provided a platform for everyone with an internet connection to purchase coverage with a click of a button and travel hassle-free. For insurance agents, it is an opportunity to increase revenue, diversify the portfolio, and scale exponentially by selling travel insurance.
The age of automation
Automation has proven to be the long-awaited game-changer of the industry. According to research conducted by McKinsey Global Institute in 2017, 43 per cent of the insurance and finance industry has the potential for automation, saving millions of dollars by eradicating repetitive processes.
Presently, insurers face challenges with optimising operational costs, improving customer experience and maximising ROI. The businesses that have currently implemented automation have witnessed a positive impact and an increase in revenue.
Formula to scale up business
Medical emergencies are expensive and may occur at any time. Most consumers today are also aware of the fact that domestic insurances do not cover international networks. Hence, travel medical insurance is the only investment that can offset the risk of having to incur huge medical bills during a vacation.
By leveraging technology, insurers can sell travel medical insurance online, overcome challenges, and boost revenue
The advent of automation, coupled with the increasing demand for travel insurance owing to the rise in travel and tourism, manifests as the best opportunity for insurers to sell travel medical insurance online. Selling international travel insurance online in the current market scenario is the best formula to scale and drive volume for the business.
The easiest way to sell insurance: go online
It’s no surprise that the penetration of smartphones has brought many people to purchase/operate everything online. The shift from traditional methods of selling insurance to applying for a suitable insurance plan online has also allowed absolute transparency and ease. Quelling the debate of using cloud insurtech, seven in 10 insurers are using it in their business today as an integral part of their technology environment and business platform strategies.
Some of the benefits of selling travel medical insurance online include:
- - Reduced operational costs. An option to purchase insurance online eliminates the need for a physical space, thereby reducing any additional expenditure. It also leads to providing cost-effective insurance policies to the customers.
- - Faster processing. Insurance plans available online allow customers to fill in the information in a few steps which can be submitted later for review. Earlier, a significant amount of time was lost in approaching the insurance agent to check the progress or edit any details and delivering the papers to the respective department for perusal. An online marketplace for insurance allows the sellers to gain more customers and the customers get to enjoy their benefits faster.
- - Customer experience. Selling insurance online improves the customer experience. Users can reach out to their insurer through the platform, gain access to insurance plans, and compare other insurance schemes before making the right decision with ease.
The need for a one-stop solution
While the insurance industry is profitable, selling insurance is not easy. Distributing insurance plans online requires sound technological prowess to drive the business and provide effective customer service. The ultimate one-stop insurance platform should:
Include features to attract and multiply the customer base to buy travel medical insurance.
Keep up with new technologies to improve customer experience and update new features.
Include interactive and innovative software such as quoting engines.
Include an option to customise existing or new insurance plans.
Provide regular training to keep up with the latest insurance trends.
The current market trends indicate an accelerated growth in travel and tourism and, subsequently, the increase in the demand for travel medical insurance. The future looks promising for insurers to grab this opportunity to scale their business. By leveraging technology, insurers can sell travel medical insurance online, overcome challenges, and boost revenue. ■