The digital travel revolution, next-gen consumers and the role of insurance

Over the course of two interviews, PhocusWire spoke to Beth Godlin, president at the Aon Travel Practice, about a wide range of issues in the travel industry.

The first is a Q&A where we discuss the role of travel insurance and its place in a fast-evolving landscape that is embracing digital transformation.

The second, at the foot of the article, is a discussion recorded during The Phocuswright Conference 2019 in Florida.

The travel industry is evolving along a path of increased automation and the introduction of genuine artificial intelligence. Broadly speaking, how does the world of insurance fit into or alongside those trends?

Like travel and other industries, insurance must evolve and adapt to remain relevant to consumers and businesses.

When we look back specifically at travel insurance, we can see the dramatic changes that have taken place of the past few decades.

Where a travel agent used to hand over a single piece of paper to a client that represented their travel insurance option, now consumers have far more choice. This benefits consumers by providing a range of ways to get protected.

Aon sits in a unique position between travel brands and insurance providers, so tell us about how we might see that role evolving over time?

We can continue with a theme here, which is “choice.” Aon’s position as a trusted independent broker provides our clients with far more choices, which allows us to bring the best options for that particular client.

This unlocks value and the opportunity to create a travel insurance program best suited for their customers.  It’s undoubtedly a unique benefit, which we see as becoming increasingly valuable as all industries trend toward more customization and personalization.

Much is made of personalization in travel, generally, so it seems likely that a product that should be tailored so much to the individual - like insurance - will follow that same trend?

We agree and consistently see personalization trends in the travel marketplace all along the customer journey. Repeat cruisers will have different messaging than those sailing the first time. Travel insurance is no different.

Personalized travel experiences call for more travel insurance options. We help travel suppliers deliver on those more personalized options by creating plans designed for specific customer demographics, destinations, types of travel experiences and more.

In fact, can you give us a sense of how far personalized insurance and highly optimized packages can go?

BG:One simple example is offering a travel insurance product based on not only that particular type of cruise/tour, but also on how far out the traveler is from their planned departure.

While we know that a majority of Americans (88%) believe it is important that travel insurance for leisure trips cover the cost of their travel in the event of cancellation, if your trip is only booked a few days out, an individual may not value the trip cancellation benefit as much as someone booking a year or more out.

But that last-minute booking might be offered a plan that has medical, baggage and trip interruption benefits that kick-in upon departure.

This allows more protection for that last-minute booking with benefits that resonate with that particular booking situation.

You've said previously that the "future is exciting" when we consider the emergence of new technology in the industry. Give us your detailed perspective on how those elements can actually combine to improve the traveler experience and perform efficiently for travel partners?

We don’t have to guess anymore about what our customers want. They are telling us very openly and directly, and that creates so much possibility in terms of the travel experience of the future.

Social media really helped bridge the gap in ways that other communications never could, and it’s created a generation of consumers who often don’t think twice about sharing information with organizations – whether that’s a review, their location or a fingerprint –  to get the experience they want.

The travel industry doesn’t have to go searching for these insights; they’re being served up to us directly from the source.

From there, technology is enabling travel suppliers and other partners to make sense of all of that data to deliver what customers want, sometimes before they even know want it.

Talk us through how travel brands can avoid the pitfall of travel protection insurance being seen as an unattractive proposition in the travel journey?

One of the absolutely key components of our mission is to be a direct extension of the brands we represent. Our client-partners are among the world’s most renowned travel brands, and when we touch a customer, we not only represent Aon, but we also represent that travel brand.

This is a significant responsibility that we at Aon drive home to every single colleague from the front lines to the most senior relationship manager.

Can you explain why travel brands are increasingly looking to be able to "mix and match" insurance providers and how Aon fits into this approach?

Every company has its own core competencies. They can vary from firm to firm, and also change over time. The “best” solution today may not necessarily be the best solution next month or next year.

There will also always be different levels of appetite from firms competing in an industry, and insurance is no different. Being able to compare, contrast and provide multiple options is something our clients value, especially over the long term.

The so-called "path to tomorrow" for any element of the industry can be fraught with difficulties. What might be some of the challenges that brands and Aon face with moving through the coming years?

Addressing the different wants and needs of the various generations, going into that “path to tomorrow.” We certainly see differences in travel habits of GenX vs Millennials to Boomers– from preferred destinations and travel partners to barriers to travel.

For example, according to the Leisure Travel study we conducted with The Harris Poll, Baby Boomers are more likely than Millennials to say they would be less likely to book travel to certain destinations due to high cost or a remote location.

That survey also tells us that Millennials, Gen Xers and Boomers are more likely than Gen Z to be planning 2020 vacations to an all-inclusive resort/cruise. And that among those who have traveled in the past year, Gen Z are more likely than older generations to have experienced travel disruptions due to trip cancellations.

With these diverse attitudes, preferences and experiences converging, the travel industry as a whole has to be more nimble than ever before.

What forms of technology might come along to help with the aforementioned challenges?

We’re seeing so many emerging innovations that are making it easier and easier for consumers to purchase and activate travel insurance. In fact, some new technology means little to no effort on the consumer’s side.

For example, GPS sensors can provide highly personalized coverage recommendations based on traveler’s geographic location that can be purchased in a click. And claims technology is going a step beyond the AI and real-time digital filing we’re seeing today to parametric coverage, which provides immediate payment upon a triggering event like a trip delay.

Systems automatically know when an itinerary is delayed a certain amount of time, so payment can be made immediately to an impacted traveler.

Technologies like these will be game changers for the traveler and the industry because they break down some of the traditional barriers to purchasing travel insurance – like the perceived challenge of finding the best plan or the lag between filing a claim and receiving payment – and open the doors for greater adoption.