Imagine you’re going skiing. You booked the flights months ago and have been looking forward to it ever since. You bought yourself a new ski jacket and your bags are packed. But a few days before you go, you discover there hasn’t been enough snow and the slopes are closed.
Or perhaps you’ve planned a romantic break to Santorini to celebrate your anniversary. You woke up early to get to the airport, only to find your flight has been cancelled. Now, you’re going to miss your booking for a celebratory meal at the island’s most popular restaurant.
Then, after these disappointing experiences, you spend months trying to claim your money back through a long and difficult insurance process. Or you find you’re not even covered for the events that ruined your holiday. Something needs to change.
The world is personalised and those offering generic products will feel the strain if they don’t adapt. From buying new shoes to booking a holiday, consumers require seamless experiences that are tailored to their own needs and preferences. And insurance is no different.
So what does the industry need to do to catch up with the rest of the world? Evolving travel trends provide a great example of how protection services can adapt to meet customer expectations.
With the direct understanding of their customers’ needs, it is the travel agents and operators that are best positioned to offer tailored insurance policies, using their access to unique first-party data to propose the most relevant insurance
Keeping up with travel trends
The travel industry looks very different to 10 years ago. Solo travel and sustainability are growing considerations for travellers who increasingly make choices based on environmental and social impact.
Virtual interlining, which allows travellers to uncover cheaper deals by taking multiple flights with different airlines using a single ticket, is gaining traction. But with flight delays more than doubling in the last four years, multi-stage, multi-provider journeys increase the probability of experiencing delays and therefore missed connections and resulting problems such as lost luggage. Specialised insurance policies that specifically cater to this type of trip are therefore vital.
Travellers are also getting more adventurous, increasingly using technology to suggest new locations, experiences and activities. According to
Booking.com, almost 60 per cent of global travellers want tech to offer them wildcard options that introduce them to something entirely new, based on their preferences or previous trips. But if insurance policies don’t reflect the unique mix of activities and transport selected by a traveller, the chances of poor experiences grow.
Protecting the traveller experience
With the direct understanding of their customers’ needs, it is the travel agents and operators that are best positioned to offer tailored insurance policies, using their access to unique first-party data to propose the most relevant insurance.
Take skiing as an example. Climate change has led to increased winter temperatures in some of Europe’s top resorts, meaning less snow and an increased risk of ruined holidays. An appropriate policy might offer consumers the option to cancel a few days ahead of their trip if dangerous weather or a lack of snow is forecast. This peace of mind will be increasingly important for skiers as temperatures increase.
But the ski protection is wildly different to the needs of a business traveller who misses a connection on their way to a vital one-day international conference. And a young family travelling for a two-week break would be most concerned with a completely different set of risks once again. Generic, one-size-fits-all services from businesses with little understanding of the customer simply don’t make the grade.
Updating compensation models
Even if the risks of a specific holiday are covered, filing an insurance claim is a convoluted and lengthy process most travellers would rather avoid. Some don’t even bother.
Parametric insurance that determines compensation parameters prior to purchase, and compensates consumers automatically and immediately, must be embraced by travel businesses. With simple conditions based on indisputable data-centric events such as cancellations, delays and weather forecasts, the approach removes the hassle of claiming, improves customer experiences and protects businesses’ reputations. The enhanced trust this introduces encourages customers to stay loyal to the company they’ve travelled with, ultimately driving ongoing success.
Even if the risks of a specific holiday are covered, filing an insurance claim is a convoluted and lengthy process most travellers would rather avoid. Some don’t even bother
Using artificial intelligence and machine learning to process data, generate predictions, and make decisions around the most appropriate compensation type, the insurance model also allows a choice of protection options to be offered – whether a financial payout or an upgrade to first class on the next available flight.
As the new decade begins, consumers want flexible and accessible insurance policies that are tailored to their individual travel plans, ensuring they pay for exactly what they need. Travel providers that adapt to the latest trends, protect the customer experience and offer streamlined, hassle-free compensation models will be consumers’ first choice in 2020. ■