Issue 215 | December 2018
Graeme Dean, Head of Insurance at Cover Genius, explains how travel industry players – from hospitality chains to tour operators and airlines – need to find insurance partners at the bleeding edge of customer experience delivery to futureproof themselves against the changing tides of customer demands
Consumer power is on the rise, bringing with it sharpened expectations around communications and experience. With 76 per cent of European consumers adopting a quick-to-ditch mindset, businesses must upgrade their customer experience if they are to survive the high odds that are stacked against them. For travel firms, getting smart with insurance could help them reduce the risk of being ditched.
The increased pressure on travel firms to meet the shifting demands of customers is no secret: today’s travellers, in an always-on world, have become smarter, more informed and better prepared than ever before. Having instant information and solutions delivered to the palm of the hand, along with a hyper-personalised experience, is no longer a benefit, it’s expected.
Technology is helping the travel sector to move in the right direction, but insurance offerings have been lagging behind in terms of efficiency, personalisation and value.
Given the recent findings in a survey covered by ITIJ that looked at how technology is changing the sector – wherein 49 per cent of respondents cited online travel booking sites and booking assurances, including insurance cover, as a valuable advancement – there is an opportunity for travel players to upgrade to a superior customer experience. But they will need to find the right partnerships that ensure their high standards are met through the entire customer journey, from policy manufacture to claims.
The journey flow
With comprehensive insurance policies fast becoming redundant, insurance offerings need to be tailored now more than ever. E-commerce brands’ successes come from satisfied and loyal customers, so it’s important that their insurance offering matches this. Providing a customer with the right product at the right time leaves them in control and able to make the right decisions, and ultimately gives them peace of mind.
The best insurance journeys that will match the demands of today’s savvy travellers are those that take a wholly customer-centric approach that starts with the policy wording and ends with an instant payment of claims, wherever you are in the world, but that also uses data to make the product personalised. For instance, a traveller flying to Grenoble in winter should see a very different policy to one who travels to Croatia in summer.
The seamlessness of the journey comes from having the ability to tap into an underwriting and regulation framework which then offers that policy bespoke to the customer, in their own language, in their currency of choice, using a platform relevant to them. The insurance experience should blend perfectly with the wider travel-planning experience, not be seen as an awkward add-on component.
The journey should then flow just as naturally throughout the amendment or cancellation stage, so the customer can remove the benefits that they don’t want. Using the Grenoble example, if there’s two children who will be on the mountain range in daycare, the customer may not want the ski lift cancellation benefit. By creating a bespoke and satisfying experience for the customer, the business will benefit from strong NPS scores.
Getting the next stage – the claim component – right will be critical. Can the customer lodge the claim easily and in their own language? How fast is the response time? And more importantly, how quickly can they get the money back? If this stage falls down, the whole journey falls down.
The key to ensuring your insurance offering sets you apart from the rest and delivers a greater customer experience is to make sure the messaging is clear, concise, tailored and consistent with the rest of the travel experience associated with your brand. Having a consistent experience is important for customers, and technology can help deliver this: by having automated processes in place for the insurance element, it’s possible to avoid unexpected variations or confusion that might be experienced at some human touchpoints.
Delivering a first-class customer experience which begins with the policy creation and finishes with customers receiving instant payment of approved claims is, however, inherently difficult for global insurers. This is due to three key challenges:
- Manual processes in getting correct bank details, especially where the bank transfers are cross-border and where there are different rules for 90+ currencies.
- Global insurers are encumbered by monolithic legacy software systems and internal bureaucratic processes that delay claims and payment approvals.
- Banks are slow to notify payees if their payment fails.
All of the above combined can mean that global insurers have post-claim approval payment times exceeding 20 days.
The good news is that the rapid evolution across the payments industry is opening up opportunities to overcome these challenges, and insurtechs are well-positioned to make these and other improvements. With the advent of fintech service providers everywhere in the payments value chain, there’s plenty of potential to resolve the many points of friction that get in the way of faster payments. An example is instant payments – making payments in almost any currency is now possible. However, there are two important things needed.
Firstly, there’s a large service design effort that accompanies the creation of bank accounts in all those countries. While the service design ensures that customers get clarity on the micro details of payments into their preferred currency, the second major piece of work is incredibly important: a microservices approach.
This means that the customer communications, interface, payment delivery and notifications all need to come from separate APIs that sync together, but the process is seamless to a customer. It’s impossible to deliver a frictionless experience from legacy systems that encumber global insurers.
In short, it’s one thing to invest extensively on data centres, labs, and digital transformations, but ultimately the entire technology platform of a traditional insurer is not suitable or flexible enough to take advantage of the huge innovations underway in the payments space.
Customisation driving happiness
The advancements in technology that we are seeing on the insurance landscape are allowing for a deeper learning experience: you can drill down into the customers’ demands, understand their wants and needs with more clarity, and deliver the right solution.
Ultimately, what these new technology-powered insurance providers – who enable a fully customer-centric approach – bring to the table makes for a happier customer, who can now benefit from world-first features such as instant payment of claims via an API or the removal of excess on policies.
This new level of customisation enabled by technology not only means the customer is happier, but they are also receiving highly relevant policies delivered to them. With an uptick in customised policies, the days of the one-size-fits-all policies will be numbered.
travellers are increasingly demanding, fickle and often brand-promiscuous
Importantly, for those businesses leveraging these new breeds of insurance solutions, the technology is contributing positively and tangibly to the overall customer experience: developments such as the instant payment of claims have been seen to push NPS scores into the 60s and 70s, well above the industry average, which is between minus five and positive 10.
Thanks to the advancements being made across other industry sectors, customers have a new level of expectation around hyper-personalisation and delivery of a service. This is particularly apparent in the travel industry, where travel firms face the challenge of satisfying today’s travellers who are increasingly demanding, fickle and often brand-promiscuous.
It’s therefore crucial that these e-commerce travel giants integrate these latest technologies that are now emerging.
Good for business
If you’re a travel firm looking to improve your insurance offering, or just starting out on your insurance offering journey, here are our top reasons why you should look to find the right partnerships with those tech-powered insurance providers who are at the bleeding edge of customer experience delivery:
- Customer-centric policies and claims processes deliver NPS at scale.
- High NPS scores create organic customer referrals.
- Happy customers are repeat customers.
- Higher lifetime value from each customer.
- Less friction for your business at every step in the customer journey.
- Differentiation from your competition.
- Allow a growth mindset whilst your competition flounders.
- Help shift value away from global insurers towards the rightful heirs – you have the customers after all!
This article appears in the December 2018 print edition with the headline "Superior customer experience as a differentiator"