The travel sector has long been leading the way in terms of innovation, harnessing technology to deliver seamless customer-centric experiences and businesses are now boosting their offers as they increasingly mature into retailers. New tech start-ups, artificial intelligence, machine learning, bots, blockchain, even the move to a New Distribution Capability (NDC) means the landscape of the industry is constantly changing.
But the fact is, one certainty remains… the issue of uncertainty! No matter how meticulous the planning and booking processes, sometimes, things can go wrong for the traveller, from cancelled flights to unexpected sickness. At that crucial moment, they currently rely on the insurance element to help them get them back on track - a process that many travel businesses currently have little or no control over.
A new study now suggests that as technological advancements allow travel companies to own more of the components associated with travel, it could also open them up to finding a better approach to providing travellers with that all-important travel insurance policy.
The findings from a UK survey by insurtech company, Cover Genius, reveals that nearly half of consumers want peace of mind, simplicity and instant solutions when it comes to insurance, but that providers are falling dangerously short of expectations. These new findings really are a cause for alarm when it comes to brand perceptions and customer experience. As it notes "all the hard work done by the travel company to deliver the best travel experience, could be undone because of the inefficiency of an insurance claims process".
The research opens up an interesting question for travel businesses - should they be looking more carefully at how to have better control over that moment when something goes wrong for their customer?
The survey of more than 2,000 respondents showed that nearly 50% of all frustrations consumers have with their insurance experience hang on two friction points. These are the time the claims process takes (of those who made a claim, it took an average of 10 and a half weeks to be paid out) and the inconsistency of information and the stress of having to have multiple conversations to obtain information. The research found that 36% of adult consumers find chasing insurance claims to be stressful, with 27% of 18-24 year olds not even bothering to make a claim because they believe it to be a stressful process.
"Compared to other sectors like travel and finance, much of the insurance industry is dragging its heels when it comes to innovation and customer experience," says Angus McDonald, CEO and co-founder of Cover Genius. "However, we are starting to see forward-thinking disruptors in the travel sector who are already starting to tackle this problem, offering their own travel insurance products that put the customer back at the heart of the experience, and shaking up the insurance sector with new tech-powered that make the roll-out simple and achievable."
The research suggests that consumers are ready for travel insurance pain points to be addressed. It found that almost half of respondents (45%) would happily purchase bolt-on insurance for peace of mind, with over a quarter actively seeking a simpler, streamlined claims process with a one-click bolt on service. It also found that more than two-thirds of 18-24 year olds (66%) and 25-35 year olds (67%) would pay more for instant pay-outs.
While the research highlights the inadequacy of the insurance experience as a whole, there is good news and crucial learning to be taken from the findings: customers are willing to pay more, in return for a friction free and instant insurance solution. As Mr McDonald notes, travel players applying a modern cutting-edge, customer-centric approach to helping travellers when they need it most "will be a game-changer" for travel insurance.