By Barney Pierce SVP Strategic Partnerships, APAC, Cover Genius
When booking their next trip, travellers value security and a ‘safety net’ for their purchases more than ever before. Travel protection has historically resulted in poor customer experiences, especially when obtained from traditional or third-party sources, like credit cards. In order to pave new pathways to reach customers, protection must be tailored, flexible and delivered conveniently. Embedded solutions offered within the purchase journey are an innovative way for travel companies to deliver customer-centric experiences and create revenue opportunities.
Enhancing Customer Experiences
Whether it’s an unexpected illness or an once-in-a-lifetime weather event, there are many circumstances that can interrupt a traveller’s long-awaited plans. However, too often, travel companies offer their customers one-size-fits-all policies that don’t protect them in their time of need. This became especially apparent during the pandemic. An Embedded Travel Insurance Report commissioned by Cover Genius and conducted by Momentive.ai found, globally, 20% of customers who made a claim for pandemic-related reasons were not covered despite purchasing travel insurance for pandemic protection.
By working with an embedded insurtech, travel companies can bridge this gap. For example, some of the worlds largest travel companies and airlines offer customers an extra layer of flexibility with ‘Cancel For Any Reason’ (CFAR) protection embedded within the booking path. CFAR protection gives customers refunds for cancellations up to a fixed period of time, backed by instant claim payments. Travellers can enjoy peace of mind knowing their trip is protected no matter the circumstance, enhancing the customer experience and giving them more reason to book.
Insurtechs also leverage real-time data to create timely solutions that meet customers’ unique needs. With delays and cancellations becoming more commonplace, the right protection can make the difference between a minor inconvenience or a ruined trip for a traveler. Insurtechs can leverage real-time flight data to identify delays and cancellations and enable travel brands to offer customers automatic compensation in any form including cash, lounge passes and flight credits. With customized solutions that actually meet their customers’ needs, travel brands boost satisfaction and differentiate themselves from competitors who offer singular products. These solutions can be dynamically bundled and unbundled, so customers add only the protection they need to their itinerary and avoid overpaying unnecessarily. For example, some leading online travel platforms, have enhanced the travel experience for their customers with clearly worded policies and frictionless claims handling that drive retention and loyalty by partnering with an insurtech.
Claims experiences are another customer pain point travel brands can address with embedded solutions. The same embedded insurance travel report found travellers rated their post-claims NPS at -25, with credit card programs delivering the poorest outcomes for their customers (-34). Embedded insurtechs bring a tech-forward approach to claims, with a digital process that provides instant payments for approved claims via a range of payment methods in more than 90 currencies. Cover Genius, for example, holds an industry-leading post-claims NPS of +65‡, displaying the massive difference a tech-forward approach to claims can make in the customer experience.
Creating Revenue Opportunities for Value-Added Services
An embedded insurtech can help travel companies elevate their protection offerings with easy-to-read policies, optimised pricing, data-backed product recommendations, smoother claims processes and instant claim payments. These benefits all make for a smoother and more enjoyable customer experience, leading to an increase in attach rates for travel brands. For example, Turkish Airlines saw attach rates jump 400% when it launched embedded protection which was strengthened by user-friendly features and pricing experiments, and Icelandair saw 3.8x more passengers opt for protection than in the preceding period. This additional ancillary revenue enables travel brands to implement other value-added services that upgrade the customer journey and keep them top-of-mind for future excursions.
These could include ways to enhance existing offerings like airline loyalty programmes, or new integrations to incentivise customers to book through their platforms. In addition to protection, many travel companies are exploring innovative fintech products to improve their payments experience. Buy Now Pay Later (BNPL) options as well as price protection features gives customers more flexibility than ever before, and can empower them to book that trip that they’ve been planning.
Today’s customers are demanding holistic and transparent experiences from travel brands. Travel companies that are seizing this opportunity and taking an innovative approach to protection and enhancing their offerings with value-added services are strongly positioned to attract customers and drive brand loyalty in the years ahead.
‡ The score includes any type of claim and claim outcome across our partner network except for those partners with less than 30 claims and those not assessed by Cover Genius.