Do you think the UK travel insurance market has responded to the challenges Covid has presented with the right attitude in terms of policy and service enhancements?
PO: It’s been an incredibly challenging period for the travel insurance market globally. The market virtually closed initially due to the mass exposure and uncertainties involved. Many providers have since resumed sales, with most offering some form of Covid-19 cancellation cover.
Insurance is, however, only part of the equation, with tour operators, travel agents, customers and insurers all playing a part in getting the travel industry back up and running, with many providers offering flexible travel arrangements, customers increasingly booking packaged travel due to the added protection it can afford. Insurers are filling in the gaps, providing limited Covid cancellation cover, Covid-related medical expenses and extended stay cover if the policyholder falls ill abroad.
Do you think that intermediaries in the travel insurance market could do more to educate customers about what it is exactly that they are buying?
PO: Intermediaries, insurers and price comparison websites all have a role to play in helping to make it easier for customers to understand the cover they are buying and especially now in relation to Covid-19 and any limitations that apply. The customer quote and purchase journey, including documentation, is key to ensuring customers understand what they are buying. Zurich returned to the market with its direct travel proposition in December 2020 and, in parallel, commissioned some customer experience research to allow consumers to provide feedback on our online quote and buy journey to inform improvements we can make.
Travel insurance has, over the years, become commoditised to a certain extent, fuelled by price comparison websites, and with many consumers also believing ‘nothing will happen to me’, price has tended to dominate the purchase decision. I do believe that there will be a ‘flight to quality’ post-pandemic, with consumers equally looking at the strength and trust of a brand alongside the price factor.
Whilst travel insurance does provide a wide range of benefits, a high-level scan of a cover benefits table doesn’t tell a customer everything they need to know and that’s why we have the Insurance Product Information Document, policy documents, FAQs and trained customer service representatives to help fill in the gaps.
I do, however, believe that the media has generally treated insurers fairly throughout the pandemic and has helped better educate consumers on the benefits and limitations of travel insurance and that whilst it is an essential purchase, it is not always the first line of defence, with travel providers and financial institutions having a key role upfront in when travel arrangements have to be cancelled or rearranged.
Pricing in the UK market is a competitive business; do you think that the market is big enough for all the players involved? How can companies stand out from the crowd?
PO: Competitive pricing isn’t everything. There is a market for both cheaper cover and higher-quality propositions. It’s more about having propositions that meet a customer’s needs and continually improving the propositions as those needs change.
Propositions can stand out from the crowd for a number of reasons, including being the cheapest, offering the widest cover, and not quibbling over claims during difficult times.
Customers need to look not only at the price of cover, but the quality of the proposition, the insurer’s reputation and levels of complaints. Having this information readily available and comparable would help carriers stand out from the crowd and make it easier for customers to make an informed decision when buying cover.
How is Zurich aiming to keep customers loyal in an age where loyalty to a brand is an increasingly difficult task to accomplish?
PO: We have remained open for direct renewal business throughout the pandemic and have updated and re-launched our travel propositions, adding cover for limited Covid -19 cancellation and curtailment. We have also added benefits for domestic travel, made our policies more flexible with customers able to book trips up to two years ahead, and the ability to move single-trip bookings on a like-for-like basis at no additional charge. We also completed a programme of premium refunds in 2020, offering refunds to 17,000 customers who could not travel and use their insurance policy. Our reward for putting customers first is their continued loyalty.
What do you hope to see from the travel insurance industry in the coming year as travel re-opens?
PO: The rules continue to change around us, so it’s very difficult to predict, but I don’t believe international travel will reopen this year to the extent that we had all hoped. It is an incredibly difficult time for the travel market generally and I believe that that a return to the level of travel we enjoyed in 2019 is some way off, probably into 2023.
Our biggest hopes are that the ongoing vaccination programme proves effective on a global basis and that tour operators, carriers and travel service providers can be creative to get through this difficult time.
In terms of business travel cover, what demands are your customers making of your products, and how is this changing?
SB: Across a wide span of industries, large companies have generally been very active in reviewing the security and incident management part of their travel policies, as they respond to some of the new issues they face. At the opposite end of the spectrum, many small and medium-sized enterprises stopped business travel in favour of virtual meetings. The majority of our interactions with this group have focused on travel cancellation and curtailment. This was particularly the case in the early phase of the pandemic when some of their staff were facing sudden travel interruptions, a change of plan while travelling, or disruption to future travel plans.
Altogether, we have seen a very substantial drop in the volume of claims. Attritional losses in particular – such as international medical expenses or loss of luggage – have fallen, balanced by an increase in the average cost and severity of claims, especially larger cancellation losses due to the cancellation of events, conferences, seminars or business fairs.
Add to this the fact that we’ve worked to extend our benefits, and we’ve been extremely busy. It’s been a unique opportunity to innovate to cover new perils and unexpected and unforeseen events with fresh benefits and services. For example, we have refined the wording of our business travel policy to cover all incidental costs related to situations where people are grounded because of forced interruption of air traffic, are subject to unforeseen forced quarantine, or an unexpected change in public circulation rules.
We enter this new, and hopefully final, phase of the pandemic with a product offering that has never been so comprehensive and so strong. This puts us in a good place to respond to the concerns and issues of our customers and their employees as international travel resumes.
Travel risk management, both pre-departure and during a trip, is essential. What does Zurich include in its policies for business travellers to help mitigate the risks they might face?
SB: Zurich has a breadth of internal expertise and extensive experience of collaborating with travel risk management, medical and security assistance providers. Some of our own team members have professional expertise acquired through direct experience in this field, and many have been working for years with travel risk management and assistance providers to support customers.
The Zurich group has built its own network of assistance partners, and has acquired and grown World Travel Protection, its own global travel risk management and assistance business, running such operations for more than 20 years with a presence across several continents.
The likelihood of a multinational company having international staff exposed to terror-related incidents remains high, and the impact for a business traveller can be severe. That is why prevention, preparedness and efficiency of response to such events is so important. In managing these risks, digital tools provide the best cost/benefit ratio, so are very useful, although they are only efficient if staff use them. Promoting the internal use of these tools by employees can be achieved through policies and education. That is why we offer online travel risk awareness modules, some of which are supported by mini videos. Our assistance and travel risk management partners also invest in edutainment. For companies with very high exposure (volume of travellers, nature of destinations, type of occupations, etc.) investment in technologies that are more powerful than GSM-based ones may be considered to cover their needs. Enforcement of specific travel risk policies for a given category of destinations and activities, automated integration with airlines and hotels booking systems, and even satellite geolocalisation technologies, are part of what is available to support these particular cases.
As travel gradually starts to re-open in the US and Europe, will business travel ever come back up to previous levels, or do you think we are going to be on Zoom forever?!
SB: We have all discovered how much video conferencing software such as Zoom and Teams can augment ease of communication and extend the panel of communications tools. However, we have also seen their limits. The need for human interactions in international trade will not disappear and the need to overcome cultural obstacles that local presence enables will remain. As the globalisation of trade is not going to stop, needs for meeting in person and local experience will remain essential.