Beginning with a short introduction to AMI, which helps insurance companies develop products in line with market dynamics, John Price, CEO at Americas Market Intelligence (AMI) shared insights from the company’s research that investigated the current status, and potential for growth of, travel insurance and assistance products in Latin America
Why Latin Americans travel is key to the ongoing development of the travel insurance market – the diaspora of Latin Americans mean that a lot of travel is to visit family, and another reason for travel is for international study, and the third is to shop due to the value of the local currencies against the dollar. Furthermore, Latin Americans who live in large population centres like to leave them for weekends and holidays, and they like to go to ‘developed’ countries on their holidays. The point is that this market will always bounce back to high travel rates – travel is a priority for Latin American people. If countries are open to visitors, they will benefit from this desire – ‘visas are an important driver of discretionary travel decisions’, said John.
“In 2019,” he said, “half of Latin American travellers had low awareness of travel insurance products, and their greatest concerns were related to loss of documents or luggage, or flight cancellations. By 2020, 88 per cent of travellers said they would purchase travel assistance products. Health insurance was the most valued offering.” Such awareness has been boosted by governmental requirements – since Covid-19 hit, six nations in Latin America have brought in legislation that requires travellers to purchase and show proof of travel insurance.
When it comes to distribution channels for travel insurance, John emphasised that digital channels would continue to grow, and with it would come innovations in customer service provision. “Insurers, he added, “would benefit from investments in customer experience that emphasise digital driven self-service.” Adoption of digital channels and services will be well received by Latin American travellers, who are more tech-savvy than the average American, he concluded. Latin Americans under the age of 45 have, by and large, stopped using travel agents – instead they are relying on the digital support they can garner from travel assistance and insurance providers.
Latin Americans under the age of 45 have, by and large, stopped using travel agents – instead they are relying on the digital support they can garner from travel assistance and insurance providers
Insurers, John added, would also benefit from the creation of, or enhancement of, provider networks, which will enable better management of claims and more competitive premiums.
John then looked in more detail at the outbound travel markets in many Latin American countries, including Argentina and Mexico, with their well-established links to Europe and the US. Finally, he put the spotlight on Brazil, into which, with different regulations placed on travel insurance sales and the language being Portuguese rather than Spanish, it is comparatively more difficult for insurers to seamlessly transfer existing products. Demographics – who is travelling – is also vital to understand, because it is changing. The fastest growing demographic is the elderly, and how assistance companies build their services to respond to the needs of this customer segment – and others that are growing, such as the LGBTQ community and unmarried young – will be key to marketing campaigns, market development and growth going forward.