It’s Personal – The Future of Travel Insurance

After two years of uncertainty and cancelled travel plans, customers are eager to return to normality and plan those family holidays. The yearly Vacation Confidence Survey statistics showed that pre-pandemic, 43% of Americans planned summer holidays, whereas last year, 60% did. Even as inflation worries dominate the headlines, consumers are still keen to book holidays. 

But the pandemic has changed, and travellers’ priorities regarding bookings and insurance have evolved. In today’s travel market, customers are driving growth as they demand more from their travel partners and more for their money. 

Customers want… simple options.

It’s often assumed that consumers want more and more control. They have become increasingly sophisticated in their purchasing habits, but the more options they have. The more complex the decision-making process becomes. Online shopping cart abandonment is at an all-time high, with the cruise & ferry industry fairing the worst with a 98% abandonment rate. There are many reasons why consumers put together an order and end up not following it through – but the last thing they want to feel when booking a holiday is overwhelmed. 

So what’s the solution? Many options, from upgrading to premium economy, booking a room with an ocean view, paying for a rental car with loyalty reward points, etc., can become stressful to a customer’s booking journey. Offering too many choices comes with considerable risk, and customers may abandon their booking altogether. Instead, customers want a simple approach to booking and highly personalized options for them and their specific needs.

Customers want… a tailored experience.

This is where a tailored, personal booking experience comes in. Customers want to feel that the add-ons for their trip have been specially designed for them, not just generic sale pitches. 

But a tailored experience doesn’t just mean using data from a past purchase to tailor add-ons. It’s about the customers’ exact needs on that holiday. How many travellers are on their itinerary? Will there be children with them? Are they taking part in any extreme sports? They might like advanced boarding and extra baggage or would like to upgrade to a larger room with more living space. Or they might need weather protection for their outdoor experience.

As Skift, the leading research provider for the travel industry, states, “Selling unbundled services doesn’t automatically translate to bottom-line results. As travel brands navigate the road to recovery, a successful ancillary strategy relies on a balance of human creativity and machine-based learning to deliver the right message about the right product at the right time.”

A hundred different travel customers could each be interested in a particular type of add-on to their booking, depending on their circumstances. It’s up to travel and insurance providers to have the right solution in place to find the right product and capture the customers’ interest. They were translating it into a transaction that meets their needs. 

Customers want… flexible solutions. 

With all the uncertainties around travel and holidays during the pandemic, it’s not surprising that customers are now after flexible solutions to help insure them against the unexpected. You’ll be hard-pressed to find a consumer who has not had their travel plans changed or cancelled over 2020/2021. From now on, customers want to know their holidays are protected with flexible booking options. 

“After two years of trip-planning uncertainty, many travellers seek the peace of mind and protection that travel insurance provides. Hospitality brands can improve guest loyalty by making enhanced insurance products and offers available — otherwise, potential guests may look elsewhere for that boost of confidence,” Skift’s report continued.

It’s time for travel partners and insurance brokers to put customers at the centre of their delivery to offer protection, flexibility and personalized choices. A happy customer is a returning customer who brings lifetime value and revenue to today’s travel landscape. 

Ido Hertz, VP of Product Insurtech Pattern, comments, “Insurance offerings are successful when delivering customer value first is at the heart of everything we do. By simplifying the purchase decision for the consumer, we can deliver the right product or solution at the right time. Travel brands’ main priority going into 2023 and beyond should be making every choice feel easy.”

Naturally, the travel industry and associated insurance protections will continue to evolve as the latest technologies and trends emerge. However, as long as the industry remains committed to keeping customers at the centre of this, 2023’s travel outlook is looking positive. 

About the author

Ido Hertz is Vice President of Products for Pattern Insurance in Tel Aviv, leading their rapid growth in the global embedded insurance market. He is shaping the company's product vision, strategy, and execution.

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