Q&A: Tech, people and policy - the evolution of travel insurance

Beth Godlin has worked in the travel insurance sector for 25 years, so is well-placed to analyze where it has come from and where it is heading.

PhocusWire spoke to the president of Aon Affinity Travel Practice to understand what are some of the unique challenges that the sector faces as both the industry and consumers evolve.

What kind of broad trends do you currently see driving the customer experience with travel insurance?

One of the central goals and improvements is speed. When you ask customers what their issues are with any insurance product they will often tell you it’s the level of effort that they have to extend if they need to use the product.

We have spent a lot of effort on – and what I see others doing – is trying to ensure that we can as quickly as possible get information to the customer and take advantage of technology that allows us to get a claim determination completed quickly as possible.

Hasn’t it always been that speed is a major consideration, or is it because we’ve become a more connected world and we demand things faster?

I would say “yes”, “yes” and “yes”. But one “no”. We’ve always been in a speed-focused environment – and technology has been an enabler of that. It’s not easy to improve if you’re sitting down and doing everything by hand versus having a tool that allows you to be form-less.

Our new tool allows people to upload pictures, receipts etc. It would take a lot longer than that to get a paper form completed and then posted by mail.

One thing we are seeing in the industry, but not really taken on yet by customers, are some products now that are using publicly available data to pay a claim automatically, even without the customer making a claim.

Examples of that are the delay benefits – if your fight is delayed by X number of hours, you automatically get a payment of Y.

Sometimes you have to file a claim to do that, but in some cases there are databases that are matching the customer record to the flight delay and sending an automatic payment.

We’ve probably seen five or six of those companies over the last couple of years but, again, they are fixed payments. They are sexy, but they do not cover non-refundable expenses, it’s just a nominal payment for what happens.

But that’s an example of where companies are trying to innovate on product, with speed as the end goal.

How has the product itself changed in recent years, as a result of traveler habits?

It has changed enormously over the last 5-10 years – mainly because the world has changed enormously.

There are a myriad of things, in this connected world with all of these new destinations that people are going to, where things can happen. And so what has happened is that the products have iterated to protect more reasons for cancelations, extreme weather, etc.

There are more products that cover those types of things. We are also seeing a real increase and appeal in the cancel-for-any-reason product.

That’s really taken off as it gives the ultimate flexibility to the customer.

Now they may not return all the money, or just portions of it, but the central premise here has been to cover more, because we need to cover more.

How have insurance providers had to evolve as a result of consumer technology and its connectivity?

For us the instant connectivity has not really changed things. People still call with great frequency when they need immediate help - most of the time they are still calling.

What are your travel brand partners looking for?

They want product innovation and product iteration. They want to know that the product is evolving with the needs of the customers. They want service innovation and iteration, too.

Around 60%-70% of our claim interactions are online. The goals of brands are no different than the goals of customers.

We’ve looked at service providers over the years that could enhance the experience and we present those to our clients because sometimes there is something that helps in baggage expediting, for example, which is not primarily an insurance product but could add value to the consumer and solve a pain point.

A popular discussion point at the moment is the concept of travel retailing, especially online – how do you see your role evolving, if at all?

We’ve certainly seen an increase in the locations and opportunities for a customer to buy products.

Back in the day there were a limited number of places, but now there are a lot more opportunities and different opportunities.

Insurance is very regulated – so the language that is used and the guidance around the presentation of the product are fairly set across insurers and providers. So in that sense I don’t think it is changing much.

That said, because we work with travel supplier partnerships, all of our programs are customized for the trips that the supplier is offering.

This is something that retailers cannot do so much because they have one size fits all products.

Do you see any particular developments in technology – say, chatbots – having an impact?

Yes, absolutely. We’ve been testing instant messaging, for example, and I think there are some benefits to it and there are some kinks to work out, to be honest.

You’ve got to manage a workload and staffing, but if a customer is on IM and you have to drop what you’re doing to answer something, because of the nature of that medium and the expectations of that customer, then it impacts productivity.

It’s certainly our responsibility to take a serious look at ways new technology can improve the customer experience but also to balance that with productivity goals.

What about hyper personalization of the product online, mirroring that in airlines and hotels?

I think some of it can actually. But it really depends upon on how many leisure trips we take as customers.

Remember, people aren’t necessarily buying insurance for business trips today, not in great frequency.

You take a look at the number of leisure trips you take, when it’s to a destination where that you want make sure you have medical protection, or you’ve got a cancelation risk that you want to insure or the cost to return home unexpectedly would be too high.

If that’s not half a dozen times a year, personalization at the consumer level is dependent upon learn-and-repeat - so the degree that you have that environment, then sure.

We achieve some of that with partners, so we as wholesalers customize at the destination and product level.

A lot of new tech-led concepts in the industry are dependent on the sharing of data between organizations. How do you except some of those to happen?

Collaboration happens between us and the travel partner. We’re in a relationship with a travel partner and, to that extent, if we have information that the customer is comfortable with sharing then we can use that to improve the customer experience.

Now we’ve seen that with millennials – a willingness to sacrifice some amount of privacy for some amount of enhanced experience.

It has to be collaboration between the customer, us and the travel provider.

What do you think you and partners can do to foster some kind of brand loyalty?

We don’t have any ego related to our brand. We’re identified as the program administrator, the program broker, or whatever role we take, but claiming identity in the sector is not a goal.

We support and rely on our travel partner and their consumer’s loyalty. We have to work really closely with the partner during the claim experience, for example.

If there’s weather heading to an area in the Caribbean or the Atlantic, we’re on the phone over the weekend with our partners, understanding what customers will be affected, what the penalties might be.

We want to know ahead of time so that we can help them complete the process better than an independent product can.

That’s how we believe we generate loyalty for the product through the partner.

Unfortunately we’re a product that really shows its chops when things go wrong!

What kind of conversation would we be having – or need to be having – in three years time?

My guess is that the product will continue to evolve to emerging needs. We would be talking about situations that are not even happening today.

We will likely see the product in more distribution outlets. Other channels will emerge, including into other, non-travel industry channels.

This changes productivity and service, because as all these elements change, so do the other pieces of the puzzle.