ITIC UK: Consumer expectations and understanding – Insurer response to changing demands
Travel insurers and specialists spoke about the response travel insurers have made to changing consumer travel demands during and after the pandemic
Andrew Tolman, Head of Business Development at Allianz Partners UK
According to Tolman, during the first few months of the pandemic, there was an unprecedented customer demand to speak to their travel insurance provider; and even now, there are ongoing spikes in demand. However, there is currently a lack of data on consumer behaviour due to the constant changes.
“When the pandemic hit, there was a lot of focus on the insurers as the primary point of contact,” Tolman said. “However, travel insurance is not designed to cover every eventuality, or every loss or inconvenience experienced while travelling.”
Tolman added that travel insurers had mixed reactions to the change in demand. They withdrew policies and cover, put their core focus on existing customers, introduced Covid cover and free trip refunds. Allianz Partners UK also decided to keep its customers informed by constantly updating its FAQs and internally sharing information.
“We had to adapt to being flexible,” Tolman added. “Everything needed to be flexible, as things were constantly changing.”
By Summer 2020, the insurer had built a Covid travel insurance product ready for the market, which resulted in 98 per cent of Allianz Partners’ travel partners implementing Covid cover and a 25-per-cent increase in policy sales.
Now, post-Covid, the travel landscape has changed drastically: the digital nomad lifestyle is becoming more common, travel insurance is more popular and online bookings are rising. Tolman concluded by saying flexibility is especially important in adapting to consumer demand; as well as exploring digital solutions and sharing information with consumers.
Greg Lawson, Head of Travel Insurance at Collinson
Lawson focused his presentation on the first six months after the pandemic hit in 2020, when Collinson handled 55,000 claims and received 41,000 calls; a testament to how much consumer behaviour changed during Covid. As a result, Collinson’s staff faced an unusually high workload, while also adjusting to work-from-home life. To make this easier on the staff, Collinson introduced wellbeing checks and Covid resources.
On the consumer side of the business, Collinson adapted by focusing on digital solutions. “One advantage Collinson had was that we already had an online claims service and could direct people to it. People will use digital claims services if they are forced to,” Lawson said.
Additionally, Collinson made Covid guidance available for its customers, hoping to mitigate confusion. The company also introduced Covid-19 medical cover.
“Sharing information is not a bad way to mitigate insurer’s costs and helping customers,” Lawson said.
Now that travel has gradually started to recover, Collinson has shifted its focus to digital solutions, to make it as easy as possible for consumers to access all the relevant information and products online. Additionally, Collinson’s products are designed to reflect the changing travel behaviours.
Lawson concluded: “We are not out of this. The variants continue. And we have seen that people who have started to travel again have forgotten how to – we’ve seen an increase in accidents. I think there will be an increase in claims in the next few months.”
Miriam Boote, Director at Designate
Boote started by saying that the pandemic significantly changed consumer expectations in travel insurance. According to the CII Public Trust Index 2021, the expectation gap widened from 2.97 to 8.24; and trust in travel insurance products has suffered as well.
“We can’t underplay the fact that the world changed and travel changed,” Boote said. “It has never happened to this degree before. Whilst all of this happened, consumer expectations changed and increased in relation to travel insurance. Confusion reigns among consumers, with many believing they are covered for eventualities that they are not. Expectations were high but unfortunately, they weren’t met.”
Additionally, customers are increasingly confused about what Covid-19 cover includes. However, the pandemic also had positive impacts on travel insurance – Boote said travel insurance has had a ‘glow up’ – it has transformed into a ‘must-have’ product and the desire to travel is higher than ever.
“Around 25 per cent of consumers said they’d give up their savings to travel again in 2021,” Boote commented. “Along with that, expectations in travel insurers are rising as well.”
Boote concluded by saying travel insurers can build loyalty and trust by connecting with customers emotionally.