The concept of affinity partnerships in the world of travel insurance is not new; however, the nature of these strategic relationships has evolved over time and new opportunities continue to emerge. The type of relationship is likely to vary as well, based on the industry vertical or segment, be it marketing or distribution. Yet one factor remains constant, in that these alliances are key in the effort to reach new audiences and increase the awareness of the importance of travel insurance and assistance, as well as the many ways in which travel protection plans add value to the overall travel experience, from trip planning to the trip itself.
AIG Travel works with many partners and a variety of different operating models and, in doing so, offers a set of capabilities relevant to each individual partnership. For those that we have traditionally referred to as affiliate partners, our objective is to establish a relationship with an entity whose brand has considerable appeal, and leverage the power of the partner’s brand to lend exposure and build some level of affinity for Travel Guard products and services. There are many instances where the partner brand is not directly related to travel but otherwise relevant in the travel space. In any event, these partners have customers coming to their outlets, and the introduction of travel insurance plans – often by way of a banner advertisement – makes sense.
As an example, there are those partners who have established an online global marketplace, where most offer a multitude of retail products, and, given the presence of other travel product brands, there is keen interest in promoting a travel insurance brand. When customers visit this marketplace – should they be interested or have a need for a travel protection plan – they can click on the Travel Guard logo, icon, banner ad, etc. and be transferred to travelguard.com. Once there, Travel Guard can then provide a quote and seamlessly deliver a travel protection plan to that customer. As one would expect, we can track this activity and attribute customers to a particular partner.
A variety of partnerships
Among the more traditional relationships are those with sellers and suppliers of travel, which vary in the form of marketing or distribution services arrangements based on the partner’s business model. Typically, in the case of a marketing services arrangement, Travel Guard is directly distributing its products and services through a given partner’s outlets, whereas with a distribution services arrangement, Travel Guard’s value proposition is technologically integrated with partner platforms and/or purchase paths.
In all these arrangements, the objective is to present the integrated offer of a travel protection plan as complementary, yet essential, to the purchase of a primary travel product, such as a packaged vacation, airline ticket, hotel stay, etc. The integrated model is ideal in the sense that it continuously promotes an awareness of the value of travel protection plans, and provides ease of access to plan information for prospective buyers of travel protection plans, as well as an ability to purchase the primary travel product and a complementary travel protection plan simultaneously.
the objective is to present the integrated offer of a travel protection plan as complementary, yet essential, to the purchase of a primary travel product, such as a packaged vacation, airline ticket, hotel stay, etc
AIG Travel’s relationship with the travel advisor community is also of vital importance. These relationships can certainly be viewed as those of affinity partnerships with respect to the brand value of large retail travel agency operations, consortia, and what is an ever-proliferating host agency segment. While our relationships within this expansive community of travel advisors differ from the partnerships described above, they are actively offering and disseminating Travel Guard products and services.
Most notably, travel advisors interact with consumers directly in the sale or purchase flow (path) of the primary travel product, but differ given that there’s an actual human to present the offer of travel protection plans when assisting their clients with planning their trips. To that end, travel advisors are affinity partners and essential as advocates for our industry in serving to assist in support of our education and awareness marketing objectives.
Niche or non-core segments
Akin to the dynamic of working with partners whose core business is not travel – yet beyond an affiliate relationship for the purpose of offering or distributing travel protection plans – there are those partners with expertise in non-travel industry segments which present the opportunity to offer bespoke insurance products and services unrelated to trip protection. In other words, the most practical – if not the only – means to access certain industry segments outside of travel is through an affinity partnership.
For example, in addition to its core travel insurance business, Travel Guard markets products which cover the financial risk associated with non-refundable sporting event registrations and event ticket purchases. In doing so, the only access to either market segment is by way of an integrated offer of product on third-party distribution platforms and through alternative channels. The registration protection product currently provides coverage to youth sport registrants, should the athletes be unable to participate in a sporting season, camp, race, or tournament due to the occurrence of a named peril. The same underlying product provides coverage to the purchasers of event tickets – for example concerts, sporting events, etc. – should they be unable to attend the ticketed event given a covered reason.
Like travel insurance plans, these products – designed to address the financial risk of involuntary cancellation due to certain unforeseen circumstances and mitigate the frustration of ‘no refund’ policies, which many sports organisations and ticket brokers have in place – provide a unique opportunity to enter niche markets via affinity partnerships and, in turn, broaden Travel Guard’s brand value with consumer populations whose demographics are, in part, compatible with those of travel protection plan customers.
Areas of exploration
As stated earlier, the world of affinity partnerships continues to evolve. We routinely evaluate existing relationships, new opportunities, emerging technologies, and various other market developments. When we contemplate working with any affinity partner, we consider all aspects of a prospective relationship in terms of commercial value, model relevance, brand alignment, customer experience, channel conflict and opportunity cost, to list some. In that context, while most partnerships yield a host of benefits which provide for harmonious and mutually beneficial relationships, there may be trade-offs. A balanced approach is vital.
the world of affinity partnerships continues to evolve
One area of particular interest is insurtech and the extent to which the proliferation of insurtech platforms will influence the travel insurance industry, benefit insurers or plan providers as noted and either grow the pie or shift market share from other distribution channels. The same can be said of fintech and the non-insurance financial services companies seeking to expand their consumer value proposition and deepen customer loyalty via the offer of travel products and services by way of proprietary platforms or, alternatively, via third-party technology relationships.
Best of both worlds
To summarise, there are many possible pathways to building brand affinity through strategic relationships. A relationship with any prospective affinity partner is dependent on several factors, including the size of the opportunity, the complementary nature of the brands, shared business objectives, the complexity of the effort, a common will, transparency of data, compatible technology and – all things considered – the viability and overall commercial value of the proposed programme. In large part, it is not about one channel or one partnership versus another, but rather about enabling channels and developing partnerships where customers visit in meaningful volumes and are most inclined to, in our case, request a quote and ultimately purchase travel protection plans.