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The post Unleashing the potential of embedded protection to revolutionize the travel industry appeared first on TD (Travel Daily Media) Travel Daily.

With the rise in tourism, the global travel protection market has witnessed significant growth from US$19.14 billion in 2022 to US$22.44 billion this year. This growth is especially prominent in Asia, where fares are about 50% higher than they were in 2019. As the industry continues to see this increase in demand, it’s paramount that travel brands distinguish themselves by creating memorable, positive experiences for their customers with tailored, end-to-end travel protection complete with a seamless claims process. By leveraging an insurtech approach, travel companies can deliver customer-centric experiences and open opportunities for ancillary revenue.

Online travel agencies (OTAs) and airlines are great at providing personalized itineraries for their customers — however, this bespoke approach doesn’t quite extend to the trip protection they offer at the time of booking. Many companies offer standard, one-size-fits-all trip protection to their travellers, which has historically resulted in poor customer experiences, especially when obtained from traditional or third-party sources.

Findings from the Embedded Insurance Travel Report, conducted by Momentive.ai and commissioned by Cover Genius, show that credit card insurance programs produce an average Net Promoter Score (NPS) of -34, the lowest of all sources. Traditional insurers have also let customers down with unclear policies and confusing claims processes.

In order to pave new pathways to reach customers, protection must be tailored and flexible with a claims experience that won’t slow travellers down. An insurtech approach can accomplish just this – it enables brands to elevate the overall protection experience through embedding solutions that are easy to understand and are offered at the right place, right time and the right price along with an automated claims process.

Meeting the demands of today’s on-the-go traveller

When booking their next trip, travellers value security and a ‘safety net’ for their purchases. But, as demand for travel goes up, airlines in the Asia-Pacific region are unable to keep up, leading to widespread operational snares, including flight delays and cancellations, higher fares, as well as lost baggage. With delays and cancellations becoming more commonplace, the right protection can make the difference between a minor inconvenience or a ruined trip for a traveller, especially if they’re in the middle of their journey.

Cover Genius created a parametric-based solution — Delay Valet — to address this very issue. Delay Valet leverages real-time flight data to identify delays and enable travel brands to offer customers automatic compensation in any form including cash, lounge passes and flight credits, ensuring fast resolutions and fewer hassles. That means travellers can now get compensated should their trip gets held up, while waiting for their approved claims to be paid out, boosting satisfaction and unlocking re-engagement opportunities.

Instant payments without the hassle

Each trip is different — standard protection plans often complicate the purchase rather than simplifying it, especially if customers find they’re not covered for the things they thought they were. Insurtechs enable airlines and OTAs to offer personalized protection plans that are best suited for their specific needs. A recent survey conducted by Momentive.ai, commissioned by Cover Genius, revealed that 20% of Global travellers who made a claim for pandemic-related reasons were not covered despite purchasing travel protection for the pandemic. By dynamically bundling policies from any category and insurer, data-leveraging APIs serve the most relevant policy bundle for each user — based on their specific needs and purchase behaviour — optimized for the highest conversion.

By working with an insurtech partner that tailors protection to the needs of their customers, travel companies can ensure nothing is overlooked. An extra layer of flexibility can be offered to customers with ‘Cancel For Any Reason’ (CFAR) protection embedded within the booking path.

CFAR enables customers to seamlessly request a refund for their purchases without having to sort through paperwork or provide documentation. A recent consumer-focused study found that 60% of customers said they’d be highly likely to book airfare if offered CFAR protection, compared to a more limited refund protection option or no protection at all. The convenience of CFAR protection leads to higher customer satisfaction, shown by a 17-point increase in NPS. 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.

With customized solutions that actually meet their customers’ needs, travel brands boost satisfaction and differentiate themselves from competitors who only offer one-size-fits-all products and make their customers jump through hoops just to submit a refund request.

Rewriting the claims experience

A tech-driven approach to protection can help address another common pain point travellers come across — the claims experience. While traditional claims processes produce poor outcomes and low NPS, embedded insurtechs provide a frictionless process that makes it easy for customers to recover their losses. Cover Genius, for example, provides instant payments for approved claims in more than 90 currencies, via a range of payment methods, resulting in an industry-leading post-claims NPS of +65^‡.

The insurtech has helped leading online travel platforms such as Agoda enhance the travel experience for their customers with an efficient claims process that drives retention and loyalty. And with versatile payment methods including flight credits, digital wallets and more, customers can easily access their payments and continue their travels uninterrupted.

Creating revenue opportunities for Turkish Airlines

The easy-to-read policies, smoother claims processes, instant claim payments and overall convenience that insurtechs offer all make for a smoother and more enjoyable customer experience, leading to measurable results for travel brands. When Cover Genius partnered with Turkish Airlines, the largest international mainline carrier in the world, together they launched embedded protection right in the booking path to its millions of customers flying to hundreds of destinations. The end-to-end customer journey was strengthened by user-friendly features and bundled coverage, with a swift claims process that only takes 5 minutes from filing to submitting. As a result, Turkish Airlines saw their attach rates immediately jump 400%.

Today’s travellers are demanding holistic and transparent experiences when booking flights, and they expect the same level of service they’ve come to enjoy from their favourite airlines and travel brands when purchasing ancillary offerings like travel protection. Embedded travel protection isn’t a novel concept; travel companies have been doing it for years. What travellers need right now is travel protection that is customized. Travel companies that are focused on the customer experience and taking an innovative, tech-enabled approach to protection and the claims process are strongly positioned to drive brand loyalty and grow their business 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.

The post Unleashing the potential of embedded protection to revolutionize the travel industry appeared first on Travel Daily.

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