Karen Wheeler, Vice President and Country Manager UK at Affinion
Travel insurance is often viewed by consumers as a necessary inconvenience, giving them peace of mind in case the worst happens while abroad.
However, it's seemingly becoming more common for people to forgo such services altogether – ABTA research in the UK shows a shocking 40 per cent of 18-24 year olds travelling abroad without insurance. When you consider the cost of medical bills when overseas without cover, it's clear that travel insurance providers have to make a change to ensure people aren't putting themselves at risk.
This may prove more difficult than it sounds, however. With the rise of aggregators and price comparison sites used to purchase travel insurance, this can often remove engagement with the provider entirely. The nature of travel insurance works against providers too – if people only travel abroad once a year, auto-renewal is increasingly unlikely.
So how can travel insurers turn the corner and transform their offering to drive brand advocacy, rather than being seen as a business that consumers turn to just before jetting off on holiday?
The broad insurance industry has long been a digital laggard, falling behind its peers as banks and fintechs sprint into the lead in the race for digital transformation. Innovation amongst travel insurance providers has largely been limited to introducing the ability to purchase insurance online.
However, it seems the winds of change are upon us and travel money provider Revolut is leading the way. The business has produced an app that uses geolocation technology to remove the burden of filling out large quantities of forms before every holiday, using a "pay-per-day" approach to travel insurance. Instead, information would be input upon download and the user can simply tap the feature on or off as and when they begin travelling, with the geolocation capability automatically pulling through location data. This is especially pertinent given the amount of people that travel across multiple countries every year – whether that's Interrailing across Europe or backpacking through Asia. Knowing the relevant insurance is at the swipe of a touchscreen gives the consumer complete peace of mind and inevitably results in increased loyalty.
Irish Bank AIB has taken a similar approach, looking to directly engage with frequent flyers by incorporating travel insurance into its mobile banking app. Although not going so far as to incorporate geolocation technology, users are now offered a one-stop-shop for all their financial needs – from managing their bank accounts and managing overdrafts, to taking out travel insurance. By removing some of the hoops many businesses still force customers to jump through, brand advocacy is increasingly likely.
Data has been key to the success of customer-facing businesses across all sectors for years now. It allows businesses to know so much more about their customers, from what makes them tick to when they are most likely to interact with the brand. Insurers have long been adept at collecting customer data – they need to know of any injuries or health issues before insurance is finalised for example. However, insurers are yet to fully take advantage of the vast amount of data available, although it appears this may be about to change. Research by Applied Systemsshows that half of insurers appreciate the importance of data and technology and plan to invest in technology to capture customer insight in the next three years.
Travel insurers should be at the forefront of this movement, looking at ways to embrace data-driven marketing to not only simplify the purchasing decision, but to also add to their overall holiday experience. For example, if data shows that a customer tends to always book a trip for the school holiday in May, the provider should get in touch at the start of the month with tailored marketing. If an insurer is at the front of mind when a family sits down to plan their next holiday, it's much more likely they will turn to that brand when looking to insure their trip. Equally, engagement shouldn't stop once the purchase has occurred. People tend to plan day trips in advance of their holiday, so insurers should share personalised offers for potential activities in the build-up to the trip. Doing so will not only add value to the customer's holiday but also ensure they remain at the forefront of their mind when they next travel abroad.
Constantly add value
Engagement shouldn't start and stop with in-app experiences and tailored marketing though – travel insurers should be the provider of peace of mind while abroad and unfortunately, so much more than theft or injuries can go wrong while abroad.
For example, although it may not be the first thing that springs to mind when you think of holidaying, there was a 12% rise in requests for UK help with cybercrime from foreign countries last year. When you consider that the likes of Greece and Spain – some of the more popular countries to visit in Europe – are officially the least prepared for cyber-attacks, tourists could be at risk when travelling with their vast array of tech devices. One way for travel insurers to add value to their customers would therefore be to offer ID theft protection within their insurance packages, going a step beyond the standard cover offered by traditional providers. This is the type of unique selling point that will likely draw customers towards the brand and position the business as key to planning any trips, rather than just another insurance provider.
At a time when consumers can purchase a full holiday package, from flights and accommodation to travel insurance and car rental, insurers unsurprisingly struggle to create brand advocates. To buck the trend and move away from protection being viewed as just another add-on or something that is ignored entirely, travel insurers must change the way they engage with customers. Positioning themselves as a true added value provider that help at every turn in as flexible a way as possible will go a long way to transform the view of the industry and drive brand advocacy, rather than indifference.