Think about what you pack when you head away on holiday. One of the key items in your hand luggage, along with your passport, will undoubtedly be your phone. And if you’ve got a family in tow, then it’s likely you’ll be taking a whole host of gadgets with you, such as a tablet, headphones, handheld games console, laptop, smartwatch … the list can quickly add up to a few thousand pounds worth without even trying. It then doesn’t take a lot to see that vast numbers of travellers will be carrying around the same tech, give a gadget or two.
However, looking back over the last 14 years, the personal effects section of UK travel insurance policies has not evolved in line with the increase in gadget ownership and especially the growth of smartphone use, and the day-to-day reliance on these gadgets, whether home or abroad.
It's all just a little bit of history, repeated
Historically, most travel insurance policies included all electronic items under the definition of valuables within their Personal Effects section of cover, all subject to depreciation, ‘wear and tear’ as it is known, and typically a cash or voucher settlement basis, which probably wasn’t enough to purchase a new device.
As the value of smartphones and gadgets increased, so did the volume of complaints relating to the claim settlement amounts. The customer may have been offered a maximum cover level of £300 (depending on the level of cover purchased) although the phone being insured had a purchase price of £750.
In the competitive UK travel insurance market, the knock-on effect of this saw many insurers remove cover for phones and gadgets from their standard personal effects sections so as not to increase the base price, and instead offer optional gadget cover to protect higher-value items, clearly defined as gadgets, rather than including them under a valuables section, with various exclusions dependant on device type, such as loss cover applicable to a smartwatch but not laptops.
Following these initial changes, some products now offer an inclusive mandatory cover element for gadgets. This is often set at a limit similar to the personal effect valuables limit to cover the lower-value gadgets. Those wanting to insure their high-end gadgets, such as MacBooks and iPhones, are then provided with the option of increased cover.
How Taurus Insurance does it differently
From the outset, however, Taurus, as a phone and gadget insurance specialist, looked at how an insurer could provide a more customer-friendly approach, and included a choice of repair and replacement options as part of our claims offering, ensuring customers were separated from their gadgets for as little time as possible. We also don’t pigeonhole value by family type, as when travelling it may well be the case that an individual, especially when on a business trip, may head away with more tech than a family group, for example.
Add to that our 24/7 online claims portal, a customer can submit a claim any day or time of the year, which is then assessed and approved within two working days of uploading all supporting documentation. Depending on where the customer is holidaying, they can choose to take their device to an authorised repair centre, including Apple Genius Bars or Samsung store, rather than having to wait until they return home.
There are several other factors that play their part in ensuring cover works effectively for customers, both in terms of purchase and use.
Make the purchase as simple as possible
Of paramount importance is keeping the sales process as streamlined as possible. Unlike the more complex purchase of a standalone gadget insurance policy where serial numbers, IMEI and more specific details of gadgets are required, when a customer selects gadget cover as part of their travel insurance policy, the customer doesn’t need to declare their items at the point of sale, as it is not the primary reason for their purchase.
This makes it extremely easy for it to be included as part of the policy. It also makes it easy for partners to integrate into their policy wordings and sales processes because it becomes part of a single travel product with no need for any additional information.
Signposting during the purchase journey, and hosting additional onsite information with supportive data and reasoning, will ensure the cover benefits are communicated effectively. Being upfront during the sales journey about aspects that aren’t covered within the standard policy, such as gadgets, results in an informed customer who, when offered a choice of additional cover options, can tailor their policy more closely to their needs meaning greater confidence in the cover purchased and improved outcomes, if and when a claim is made.
Relevancy also plays a part in the level of uptake. For example, while aspects such as winter sports and cruise will be of interest to specific segments, gadgets are used by most
travellers and as such the option to take out cover will resonate more widely.
Ensure the cover affords the widest protection With today’s ever-growing reliance on tech, it’s important that policy wordings reflect the wide breadth of items that sit under the ‘gadget’ term.
For example, Taurus’s standard gadget definition covers mobile phones, tablets, laptops, digital cameras, MP3 players, games consoles, video cameras, camera lenses, bluetooth headsets, satellite navigation devices, PDAs, e-readers, head/ear phones, portable health monitoring devices (such as a blood glucose or blood pressure testing kit), and wearable technology (such as a smart watch or a health and fitness tracker).
Effective pricing for gadget component of travel cover
Alongside breadth of cover and ease of purchase, effective pricing is of course critical to ensure the appropriate premium is charged for the gadget component. Managing this section of cover in isolation to the rest of the travel contract allows us to focus on the customer experience whilst managing claims performance in the background.
A combination of online efficiencies, in-house procurement, and regular actuarial reviews ensures the right premium is charged to the customer whilst maintaining sustainable growth. As such offering specialist cover such as gadget insurance, which resonates with today’s travellers, delivers multiple positives for travel insurance providers - not only in terms of the additional income they generate, but by achieving improved customer outcomes in terms of satisfaction, feedback, brand loyalty as well as a reduction in complaints for all those policies where the customer didn’t realise their shiny new mobile phone wasn’t covered. ■