Travel insurance is, of course, a crucial accompaniment to any trip or holiday, yet for many it is still perceived as a ‘grudge purchase’ rather than an essential holiday expense. Many travellers are keen to purchase the cheapest option available, even though this can mean that they are not buying travel insurance that is suitable for their needs and may be at risk of incurring high costs later down the line; in the form of an expensive excess, for example.
This desire for a ‘cheap fix’, combined with a tendency to purchase online, has led to a surge in the popularity of aggregators, or price comparison websites, where consumers can easily find the cheapest options available to them. However, one danger associated with the use of aggregators is that they tend to focus the consumer’s mind on price, rather than quality and relevancy of cover. These websites usually focus more on mass market appeal and have been accused of rarely communicating with the consumer to discover their individual needs.
In discussion with UK newspaper The Telegraph, Fiona Macrae, Head of Client Engagement at Travel Insurance Explained, astutely summarised the situation: “Too often, consumers are being led by price comparison websites to make their choices based primarily on price. This is often not the best option for travellers’ individual
There needs to be a balance between educating the customer and assessing their product needs to serve them the right product, and this is what aggregators need to work towards improving
circumstances and can lead to dissatisfaction at claims stage. When buying travel insurance based on price, people don’t necessarily check or understand the excess they will need to pay, should they have to make a claim. Many consumers don’t realise that any excess applied is per person and per section, and not the total excess for everyone covered on the policy ‒ which can and does lead to disappointment. This highlights the need for consumers to be offered guidance to ensure they are armed with the knowledge they need in order to purchase personalised and fit-for purpose cover.”
There is a growing awareness of the situation, luckily. For example, the Financial Conduct Authority (FCA) in the UK recently completed a review into price comparison websites to assess their effectiveness in achieving fair outcomes for consumers buying policies, and although it found that there were examples of good practice, issues were discovered in terms of presenting sufficient information to allow an informed choice and making clear the role and services provided. As a result, the FCA stated that it would more closely supervise price comparison websites to ensure they address specific issues, and engage with consumer groups to support efforts to improve consumer awareness.
Carol Mueller, Vice-President of US-based travel insurance company Berkshire Hathaway Travel Protection, indicated that the situation may be a little different in the US. She gave ITIJ her perspective on the matter: “I’ve worked with or alongside aggregators for more than 15 years. In the US market, travel insurance aggregators provide great value to the consumer looking for information and comparative pricing on travel insurance. Many US leisure travellers are still in the early phases of understanding the benefit of travel insurance and the aggregators provide not only a price comparison, but an informative, transparent look at products and benefit limits geared toward a specific type of travel.”
Daniel Durazo, Director of Marketing and Communications at Allianz Global Assistance USA, shares a similar perspective: “We work with a couple of different aggregators and find them to be valuable partners in our goal to provide consumers with the best possible travel insurance products and services.”
MoneySuperMarket is a UK-based price comparison website-based business. Using the service, consumers can compare more than 250 travel insurance policies from over 55 travel insurance brands. ITIJ spoke with MoneySuperMarket’s Head of Travel Helen Chambers, who revealed that ensuring consumers are given adequate information to help them make informed decisions about the cover they choose to purchase is a challenge.
“This is the toughest area that we certainly struggle with on MoneySuperMarket Travel Insurance,” she explained. “In other channels, such as car and home, we created our own ‘Quality Score’ metric, which takes into account the level of cover, service and claims rating to give one overall rating. Unfortunately, this is not something we have been able to productionise for travel, although we are looking at how we can bring the claims element into the journey.”
Chambers explained that many of the ‘big’ aggregators use Defaqto star ratings, which can be useful but also present challenges. “This helps customers to a degree, especially when they are making a quick purchase,” she said. “However, any rating can be misleading for customers who really need to consider what it is they want their product for; for example, there is little point in a customer getting a product with a high cancellation amount when they are taking their trip that day.” She highlighted that, when it comes to travel, there are so many elements that the customer needs to consider: “We need to understand which are the most important to them in order to support them better. There needs to be a balance between educating the customer and assessing their product needs to serve them the right product, and this is what aggregators need to work towards improving.”
The importance of technology
Rajeev Shrivastava, CEO and Founder of US-based insurtech company VisitorsCoverage, believes that technology can play an important role in ensuring the consumer is adequately informed about what they are purchasing. “With technology as the driving force, aggregators strive to simplify the quote, comparison and purchase process for the user. Technological developments in comparison tools and AI enable aggregators to provide the customer with detailed policy information before making a selection. With more than a decade of experience and extensive knowledge of the travel insurance space, we know that educational materials, such as videos, blogs and infographics, are critical in ensuring the customer is able to make a well-informed decision,” he told ITIJ.
The undeniable fact is, one travel insurance product does not fit every traveller’s specific needs
Squaremouth is a travel insurance review comparison site headquartered in Florida in the US. A spokesperson from the company highlighted to ITIJ the importance of transparency and customer education: “Squaremouth’s website design and software prioritise transparency and customer education throughout their policy purchase process. During the search process, consumers are able to use our in-depth benefit filters that help them find policies that fit their specific needs. A visual comparison tool allows for easy side-by-side comparisons of popular benefits and product costs. Clear and concise policy summaries with simplified coverage language and digestible information help consumers review coverage details in simple terms. Should consumers have questions during the process, they have access to our award-winning customer service team via live chat and phone.”
A positive relationship
When it comes to the relationship between aggregators and travel insurers, the feedback gathered by ITIJ indicates that this is largely positive.
For example, Simon Neicho, Head of Commercial at World First Travel Insurance, highlighted an effective synergy: “World First Travel Insurance has a mutually beneficial relationship with the key price comparison sites. This relationship allows us to provide open and honest feedback based on our own experiences and on behalf of customers to help improve the customer journey.”
The feeling is mutual, with Squaremouth expressing equal positivity: “We’ve found that the relationship between aggregator and provider has been and continues to be inherently positive and mutually beneficial. As partners moving towards the same goal, we consistently work as a team to provide customers with products that meet their needs, along with a high-quality user experience. We’re able to rely on our providers’ high-quality products and in return provide them with access to our unique market of customers.”
Neicho believes that the key challenge insurers face in their relationship with aggregators relates to price. “Aggregators’ primary form of ranking is still price, which poses challenges for insurers,” he told ITIJ. “Differentiating your product from your competitors is difficult when consumers are only given high-level benefits to use as a comparator. It can be argued that the terms that sit behind each of these benefits is what really differentiates one product from another, yet aside from a link to a policy wording, these terms are not clearly displayed to a customer. These terms can dramatically influence premiums across the same or similar benefit limits.”
A utopian vision
So, in an ideal world, how would aggregators sell travel insurance to consumers? MoneySuperMarket’s Chambers told ITIJ that the company is looking at a number of ways to support customers in making the right purchase. “One way to make travellers think more about their answers is to ask questions in a more conversational way,” she said. “For example, instead of asking ‘How much cancellation cover do you require?’, could we instead be asking ‘If you suddenly had to cancel your trip for an unexpected reason, how much would you need to claim back per person to cover all of your costs of the trip?’. We recently tested slowing down the question set, asking one question per page, and it seemed to have the desired effect – slightly fewer customers got through the journey, but they bought slightly higher tiered products, so moving in this direction might work.”
However, there is a balance to be struck between convenience and speed, and education and a thorough process. Chambers explained more: “In reality, we know customers are in a rush and so we need to work to serve them relevant information when we think they need it, highlighting any risks they need to consider and ensuring all the products we show them are fit for purpose and at a competitive price.”
VisitorsCoverage’s Shrivastava believes that the biggest challenge for any aggregator is effectively matching each individual traveller’s need to the right insurance product. “This is where customer education and simplification of a complicated concept is key,” he told ITIJ. “We strive to make this information readily available, through educational materials and a user-friendly platform, to make it easy for each traveller to find the appropriate plan for their trip. In an ideal world, all travel insurance would be bought conveniently online, with abundant information and education readily available, and each traveller would have access to his or her own custom policy. We are edging ever closer to this ideal world, with the development of technology, AI and a growing selection of plans with varying benefits, prices and niche offerings.”
Education and customisation
Neicho agrees that education is paramount, noting that this is something that extends beyond aggregators. “Educating customers throughout the journey about the features and benefits of a product and the offering of a broader range of comparators will assist customers in their understanding of the product being purchased,” he told ITIJ. “It is appreciated that this is a challenge for the entire industry and not unique to purely price comparison sites.”
It is an inescapable truth that travel insurance is not a one-size-fits-all product, and it therefore makes no sense for it to be sold as such. “The undeniable fact is, one travel insurance product does not fit every traveller’s specific needs,” explained Shrivastava. “As an aggregator, we strive to provide an educational platform that allows users to compare plan benefits and costs side by side, while also stressing the importance of understanding the terms, limitations and exclusions of their coverage. Technological advancements and the development of proprietary tools help to empower the consumer to make a well-informed decision.”
It is clear that aggregator websites have a duty to not only help consumers to find affordable travel insurance, but also to ensure that they are purchasing cover that is appropriate for their needs. The constant rise in online purchasing and the desire for convenience is sure to mean
It is an inescapable truth that travel insurance is not a one-size-fits-all product, and it therefore makes no sense for it to be sold as such
that consumers will continue to use these websites, and awareness of the pitfalls will hopefully mean that the aggregator websites continue to make improvements and be mindful of consumer needs that extend beyond initial upfront cost.
Travel insurance is in the midst of a digital revolution and, within this, aggregators should continue evaluating how their model can evolve to ensure improved compatibility with insurers and consumers alike. Tools such as live chat and the ubiquity of smartphones mean that education around insurance is improving. Awareness of issues, positive relationships between aggregators and insurers, growing technology and AI availability and education for consumers can ensure that travel insurance is not viewed merely as a commodity, but as the important resource that it is.