Industry Voice: Navigating the evolution of travel insurance with data

Analysing trip cost data

Understanding the cost of travelling to certain destinations is valuable for travel insurance providers for several key reasons:

• Customising coverage limits: the cost of a trip often influences the amount of coverage a traveller will need. More expensive destinations typically require higher coverage limits due to the increased costs of accommodation, activities, and potential losses. By understanding the average trip costs for various destinations, insurance providers can tailor their coverage limits to better suit the financial risks associated with travelling to those locations
• Risk assessment and pricing: the cost of a trip can also be indicative of the potential risks involved. Destinations with higher trip costs may involve more complex travel arrangements, luxurious accommodation, or activities that pose greater financial risks if cancelled or interrupted. This insight allows insurers to more accurately assess the risk, and price their products accordingly
• Trip cancellation and interruption policies: trip cost is a crucial factor in determining the benefits for trip cancellation and interruption insurance. These policies typically reimburse travellers for pre-paid, non-refundable trip expenses. Understanding the average costs of trips to various destinations helps insurers set appropriate coverage limits and exclusions for these types of policies
• Market segmentation and product development: different destinations attract different types of travellers with varying insurance needs. For instance, a luxury European tour will attract a different demographic compared with a budget backpacking trip in Southeast Asia. By understanding the trip costs associated with various destinations, insurers can segment their market more effectively and develop and market products that cater to the specific needs of these segments
• Enhancing customer experience: knowledge of destination-specific trip costs enables insurers to provide more accurate and helpful advice to customers
• Adapting to changing travel trends: as travel trends shift and certain destinations become more popular, the associated trip costs can also change. Keeping abreast of these trends and cost fluctuations allows travel insurance providers to adapt their offerings in real time, ensuring they remain relevant and competitive in the market.

Understanding the varying trip costs for different destinations equips travel insurance providers with crucial information to customise coverage, assess risks accurately, develop targeted products, enhance customer service, and adapt to changing market dynamics. This knowledge is essential for aligning insurance offerings with the specific needs and risks of travellers, based on their chosen destinations.

How travel insurance providers can better align with consumer travel preferences

Travel trends play a significant role in shaping consumer preferences. For example, a surge in adventure tourism might prompt a need for policies with higher medical coverage limits or specific adventure sports coverage. Similarly, a rise in business travel to certain global tech hubs might lead to a demand for policies with extensive coverage for electronic devices. By staying attuned to such trends, WorldTrips can develop products that align more closely with the evolving interests and activities of travellers.

We recently rolled out a new emergency medical product, Atlas Nomads, geared for remote workers who may seek flexible medical coverage and pay structure. The policy is open to non-US citizens and residents who are working outside their home country.

In addition to current trends, anticipating future travel patterns is crucial for staying ahead in the competitive travel insurance market. By forecasting these trends, we position ourselves to meet future demands effectively.

The data-driven decision-making process for enhanced coverage

Specialised products, such as international student insurance, have gained traction, re-flecting changing consumer demands

WorldTrips integrates destination data and travel trend analysis into its strategic decision-making and underwriting process. This approach enables us to design insurance products that are not only comprehensive but also highly relevant to the current and future needs of travellers. By incorporating data analytics and consumer trend research, we ensure these offerings are a step ahead, providing peace of mind and tailored protection to travellers venturing to a diverse array of destinations.

Incorporating destination data and awareness of travel trends is an invaluable strategy for travel insurance providers. It allows them to design products that are not only responsive to current market needs but are also adaptable to future travel patterns, ensuring continued relevance and value to consumers. We exemplify this approach, continually adapting and innovating in line with the dynamic nature of global travel trends.

Using technology to enhance the consumer experience

Technology and innovation are the driving forces behind the industry. Once reliant on traditional phone bookings, the industry has shifted to a digital-first approach, emphasising mobile shopping. We are constantly looking at ways to enhance digital consumer experiences and collaborating with regulators to prioritise transparency and consumer-centric product development, as guided by the US National Association of Insurance Commissioners (NAIC) Travel Insurance Model Act.

Despite significant progress, there is always the potential for further advancement, especially in enhancing the consumer purchase journey and improving buyer education. Our aim is to refine purchasing experiences while imparting knowledge to both brokers and consumers, navigating the complexities of swift transactions.

Adapting to rapidly changing consumer preferences

The Covid-19 pandemic, a pivotal moment for the industry, led to a shift in product pricing and adaptation, prioritising consumer needs over profits. This shift is evident in varying market trends across countries like Canada, Australia, Japan, and the US. Specialised products, such as international student insurance, have gained traction, reflecting changing consumer demands.

WorldTrips, leveraging its relationship with fellow TMHCC members On Call International and INTAC in Japan, offers a global solution to policyholders.

The pandemic – my biggest career challenge – also presented rewarding opportunities. WorldTrips’ quick adaptation and product expansion to meet new needs, including managing over 1,200 evacuations through On Call International, highlight our commitment to responding effectively to global crises. The development of new travel medical products and the introduction of comprehensive trip cancellation options, including ‘cancel for any reason’ coverage, are testaments to our dedication to evolving with the travel climate and meeting consumer needs.