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Insurtech startups: The new lifeline for the customer’s travel insurance journey?

Is there a disparity between the insurance provider’s offering and the customer’s needs?

Ryanair chief executive Michael O'Leary said "media hysteria" forced European governments to reimpose travel restrictions in December
Image: © AFP/File Odd ANDERSEN
Image: © AFP/File Odd ANDERSEN

A travel insurance survey reveals that global consumers are dissatisfied with the customer travel insurance experience – from service offerings, claims, and COVID-19 related insurance perspectives. Embedded travel insurance providing digital add-ons for the customer’s convenience may be the answer, as part of insurtech innovations.

Insurance providers should leverage services from startups that disrupt the traditional travel insurance industry ecosystem and instead favor consistently keeping customers at the forefront. 

According to a recent survey conducted by Cover Genius, 43 percent of travelers intend to switch to an alternative channel rather than where they previously purchased travel insurance. The survey delved into the embedded insurance travel industry and examined consumer sentiments on buying travel insurance during the pandemic. The results show a clear disparity between the insurance provider’s offering and the customer’s needs. 

While the census-balanced survey of over 15,000 global consumers spotlighted pandemic-related claims, it is clear to see that traditional one-size-fits-all insurance misses the mark on the new types of scenarios travelers need coverage on. This calls for solutions that allow customers to get insurance bundled with products and services that matter to them and where they matter most. 

Many people on overseas trips will not seek medical assistance abroad, according to Air Doctor (and provided to Digital Journal). A recent assessment by the company show that up to 20 percent of international travelers get sick whilst abroad, but only 15 percent of these will actually seek medical care. Much of this can be attributed to the hassle, cost, and uncertainty behind medical processes abroad, as well as cultural and language differences. Technology-led approaches that allow customers to get the services they need conveniently are the only way to better protect customers. 

It would appear that global consumers are also looking for a simplified claims experience. For example, Cover Genius reported that travelers rated post-claim Net Promoter Score (NPS, an index of customer satisfaction) at -25, with credit card insurance programs delivering the poorest outcomes for customers with post-claim NPS at an astonishing -34. And online insurers and traveler providers/agents receiving -15 and -9, respectively. All in all, a dismal outcome that further stresses the need for future-ready services built around customer-centricity. 

On the other hand, new entry startups have the potential to transcend NPS averages. This is a sign of a changing digitally-led shift, where insurance becomes distributed through new channels or bundled into a product experience. 

Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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