Consumers likely to purchase travel if offered Cancel for Any Reason Protection: Research
A recent global report found that consumers who are offered ‘Cancel for Any Reason’ (CFAR) protection, when purchasing live event tickets or booking travel, are highly likely (60%) to purchase the underlying event ticket, airfare or accommodation, compared to a more limited refund protection option or no protection at all.
CFAR Refund Protection enables customers to seamlessly request a refund for their purchases, without having to sort through paperwork or provide documentation. The convenience of CFAR protection leads to higher customer satisfaction, shown by a 17 point increase in Net Promoter Scores (NPS).
This is according to a recent report, conducted by Momentive.ai and commissioned by Cover Genius that analysed 10,300 global consumers from eight countries, including the United States, United Kingdom, Australia, Japan, South Korea, Brazil, Germany and France, to understand consumer experiences when requesting refunds and the interest in adding CFAR Refund Protection.
Live Event Ticketing
Findings from the report show global ticketing consumers want CFAR protection when booking tickets for their next big event, and they’re more likely to purchase those tickets if they have that option. 63% of respondents said they’d be highly likely to buy a live event ticket if offered CFAR protection — that number goes down to 54% when offered a more limited refund protection option. Not only are ticketholders more likely to purchase CFAR protection compared to non-CFAR protection, they’re willing to pay more for it. Respondents said they’d be willing to pay 123% more for CFAR protection than non-CFAR protection (29% extra of the ticket value vs 13% extra of the ticket value), with most nominating convenience as the primary reason.
According to the study, those who have purchased CFAR protection have been considerably more satisfied with their experience, rating their NPS score 10 points higher on than customers who purchased non-CFAR protection.
As with live event ticketing, the global travel sector has seen higher demand and satisfaction with CFAR protection when customers book flexible airfare and accommodation. 60% of travelers are highly likely to purchase an airfare when given the option to purchase CFAR protection rather than non-CFAR protection (60% vs 48%). Driven by the same convenience, they’d also pay 133% more for CFAR protection.
Travellers that have purchased CFAR protection are also more satisfied with their experience, reporting an 12 point increase in average NPS. This is compared to the poor experiences reported by customers purchasing non-CFAR refund protection, resulting in a low NPS of -33.
Despite the consumer’s desire for CFAR protection, 5 out of 10 respondents were not offered ‘Refund Protection’ for their most recent live event ticket and/or accommodation and/or airfare. This gap presents an opportunity for digital companies across both industries to drive customer satisfaction and add-on revenue by offering CFAR Refund Protection.
“Today’s consumers are resoundingly opting for comprehensive, convenient protection options like CFAR,” said Angus McDonald, CEO and co-founder of Cover Genius. “Insurtech’s can help digital companies meet this demand with seamless integration via an API for ticketing platforms, venues, resellers, airlines, OTAs, hotels and more. Our award-winning distribution platform, XCover offers refund protection for any event, anywhere in the world, with CFAR and other travel insurance options that drive customer satisfaction and add-on revenue.”
This research follows four groundbreaking reports that found customers worldwide desire other types of embedded protection from property players, airlines and travel agents, banks (for whom a majority of customers favor receiving offers based on transaction monitoring) and retailers.