We’re living in a world of pre-packaged bundles to give consumers perceived value, which in some cases is true, but in the world of travel insurance, customisation and choice reign supreme. Take the home and car insurance industry in the US as an example. Everywhere you turn there are offers to ‘switch and save’ or ‘bundle and save’ – this approach works for them. Why? Bundling these two products leads to discounts in premiums paid to the insurer. The other key factor in this equation… claims history.

Bundled travel insurance, particularly in the US market, looks very different to this. With a bundled, pre-packaged travel insurance plan, providers cannot:

• Offer premium discounts when you bundle trip cancellation and emergency medical (as an example)
• Know a traveller’s claims history to increase or decrease the premium per policy
• Reward loyalty or provide a ‘safer than the average traveller’ inducement to sell or resell.

We don’t hate travel insurance bundles at battleface. In fact, some of our global plans outside the US are bundled with the option to customise various limits. The origin story for why we shifted our US travel insurance to an unbundled/modular model dates back to the Covid-19 era when Lisa Conway, Chief Insurance Officer, joined our team. It was a strategic move for us to differentiate from an already crowded marketplace of very similar bundled offerings.

The un-commoditisation of unbundled

Travel insurance in the US has been evolving more into a commodity as the years go by. It’s not a ‘true’ commodity by the actual definition of the word, but when you think about travel insurance in relation to differences in price and benefits, the similarities industry-wide are impossible to ignore. Dynamic rating shifted the model in a big way, but mostly at the benefit of risk mitigation, and, in some cases, particularly on comparison sites, lower prices for low-risk destinations would win compared with plans not algorithmically set up this way.

The way we do unbundled, or modularity as it’s also often referred to, is driven primarily by innovation in application programming interfaces

The way we do unbundled, or modularity as it’s also often referred to, is driven primarily by innovation in application programming interfaces (APIs). The diversity and uniqueness of trips and traveller preferences, from our viewpoint, should not be confined to a good, better, best type of offering with essentially the same benefits, just at different levels and price points. Cancel for any reason (CFAR), as an example, might be viewed by some as an unbundled offering. This is not the case. CFAR is now ubiquitous and while it’s a valuable benefit to offer, it’s an optional upgrade not made available to every traveller going through the booking path.

For battleface, unbundled, both as a direct-to-consumer offering and offering to our insurance partners, breaks apart the key benefits (of a comprehensive travel protection plan) into an à la carte menu type of format. This would give both consumers and partners the option to choose whether they want the following benefits:

• Trip cancellation
• Trip interruption
• Trip delay
• Baggage protection (for lost, stolen, delayed, or damaged luggage)
• Travel medical and evacuation.

When it comes to the economics of travel insurance, there’s an endless supply, and demand is seasonal. However, price elasticity is real when it comes to how consumers buy a policy.

Example of how battleface unbundles a plan on the quote results page

Personalising coverage for a consumer: upon arrival, consumers can toggle between different types of trips by selecting pre-set recommendations, as shown in Fig 1.

If a US-based traveller buys a bundled plan for a domestic trip, do they really need travel medical benefit

An unbundled cart: consumers also will see default selections made by the quote system which will appear on the right side of the screen, as shown in Fig 2. From there, consumers can decide if they want to keep or remove the preselected benefits.

Module cards for ease of customised bundling: on the same page, a consumer is shown several options to bundle their plan. Most of these options are benefits that would come pre-packaged in a typical bundled plan. The key point here is allowing consumers to choose which ones they want and make the most sense for their trip. For example, if a US-based traveller buys a bundled plan for a domestic trip, do they really need travel medical benefit? With our approach, they can opt out for a lower price.

Details of simulated quote: Quote simulated in Fig 3 is a solo 45-year-old traveller living in Ohio travelling to the Bahamas, Jamaica, and Mexico in 2024 from 24–30 March with a trip cost of US$2,500. Prices in the screenshots are applicable to this simulated quote only and will vary based on age, trip cost, and trip length.

Our data to show an unbundled approach converts better

We spent some time looking into our historical conversion rate data on our direct-to-consumer website and purchase path as it relates to our unbundled US-based plan versus our bundled plan in the UK. Here were some of our key takeaways from this analysis that supports the topic at hand:

Consumers who finished the quote process (saw a number) and bought an unbundled plan converted 66% better than those looking at the bundled plan

1. The percentage of consumers who started the quote process for and purchased the US unbundled plan was 10.3% higher compared with the bundled UK plan
2. This data point may seem shocking, but it’s true: consumers who finished the quote process (saw a number) and bought an unbundled plan converted 66% better than those looking at the bundled plan
3. And lastly, one of our favourite metrics in travel insurance, average order value (AOV). This one was also surprising. Even though the unbundled plan converted more started and finished quotes, the AOV was twice that of the bundled plan.

Source of data: battleface.com web and purchase analytics from 2023 for the US and UK markets.

How our partners leverage an unbundled product

Curiosity has seemed to pique on the topic of unbundled – and for good reason. As the opening paragraph suggests, truly customisable plans, flexibility in offerings, and choice, are highly desirable when considering how and why people travel. The beauty of an API-driven, unbundled approach is aligning product specificity for all the reasons people travel.

We’ve had some partners come back to us with insurance attachment rates of around 35%, a metric that most of us would kill for

We’ve had some partners come back to us with insurance attachment rates of around 35%, a metric that most of us would kill for. Imagine if you could take an attachment rate from around 20% up to 35%. With unbundled, we know now that it is possible.

Ease of use, as well as A/B testing, comes to mind when thinking about partner integrations. The experience for one of our partners is quite literally a single landing page where they toggle through benefits and then pick and choose which ones they want to offer to their clientele. Radio buttons for each benefit are selected or omitted and then delivered to a front-end user interface (UI).

Evolution of unbundled in travel insurance

Our prediction for 2024 is we’ll likely begin seeing more unbundled-type products hit the market. It’s our belief this concept is not going away but will continue to be embraced by the industry.

As we evolve as a company, modularity will remain core to what we do. Some might argue that the burden of choice can/will be too cumbersome for consumers and detrimental to conversion. We’re here to tell you that is not the case.