Tag: Market

Current market trends

Steven Benna, Marketing Manager, Squaremouth, confirmed a steady increase in the awareness of the benefits of travel insurance, with sales reaching new heights: “With traveller uncertainty at an all-time high due to the Covid-19 pandemic, this awareness has increased significantly,” he told ITIJ. “Travel insurance sales through Squaremouth.com surpassed pre-pandemic levels in the summer of 2021, and have continued to steadily increase as more people resume travelling. In 2021, sales were up 50 per cent over 2019, and more than 200 per cent over 2020. In the first two months of 2022, sales increased by 275 per cent over the same period in 2021.”

Beth Godlin, President of the Aon Affinity Travel Practice, confirmed a heightened awareness and understanding of travel insurance among consumers: “They’re making their travel decisions with an increased focus on protecting their investment and their health, safety and security – a lesson of the pandemic that will have a long-term impact on the way we see the world,” she stated. “As such, consumers today are more likely to consider travel insurance because it can offer an extra layer of protection against risks for the various phases of their trip, from before departure until a return home.”

Travellers are preferring to plan closer to their departure date, which is likely due to concerns about Covid, specifically changing travel restrictions and requirements, or worry about getting sick before the trip, for example

Anthony Spiteri, Chief Technology Officer, battleface, said an overarching trend post Covid is an increase in demand for travel insurance by American travel, as well as new interest in and awareness of exactly what is covered: “Prior to the pandemic only about 20 per cent of American travellers purchased insurance and based on most recent research this number has already increased to over 60 per cent,” he demonstrated. “The pandemic has also heightened awareness about the importance of travel insurance and travellers are now looking a lot closer at what their travel insurance covers. Travellers are now looking for ways to protect themselves against costs associated with unexpected medical emergencies, quarantine expenses, travel disruption, cancellation, and delay that have become increasingly common.”

Angela Borden, Product Marketing Strategist with Seven Corners, said that the insurer has witnessed an increase in recognition of the full range of benefits travel insurance offers: “US consumers continue to turn to trip protection plans for trip cancellation and delay benefits with increased consideration for optional add-ons like Cancel for Any Reason (CFAR).”

This, of course, is particularly salient in the era of Covid-19, where travel uncertainty is rife. Another trend that Borden highlighted is travellers waiting longer to book their vacations. “They are preferring to plan closer to their departure date, which is likely due to concerns about Covid, specifically changing travel restrictions and requirements, or worry about getting sick before the trip, for example,” she explained.

Spiteri told ITIJ that a desire for custom plans is on the rise: “We’ve addressed this by developing unbundled insurance products that give travellers the ability to build their own coverage plan, choosing only relevant and necessary benefits from a selection of coverage options,” he underlined. The company reports a similar trend with distribution partners, who are keen on developing products that are very unique to their platforms and the needs of their customers.

Consumer behaviour and travel recovery

Many of the current trends seen in the US travel insurance market have been influenced by the Covid-19 pandemic, which has also presented new and unique concerns for US travellers, such as the fear of testing positive when abroad. “A persistent concern for travellers is getting stuck in another country if they test positive for Covid and need to quarantine,” Borden confirmed. Another worry post-Covid is the increased likelihood of trips being cancelled at the last moment, and this is influencing consumers when it comes to purchasing cover, as Benna articulates: “Since the start of the pandemic, about 75 per cent of Squaremouth customers buy travel insurance with trip cancellation coverage. So far in 2022, 79 per cent of travellers are selecting trip cancellation coverage. Prior to the Covid-19 pandemic, this figure was consistently between 60 per cent and 65 per cent.”

Godlin said that the pandemic has placed new emphasis on health and wellness for consumers, who are now taking extra precautions to ensure peace of mind and flexibility: “Consumers have been looking to safeguard themselves at a level they haven’t before,” she told ITIJ. In turn, the industry has responded to these changing patterns in consumer desires and behaviour. “The industry has developed plans specifically to address Covid-19, meeting consumer demand and the requirements of many destinations. CFAR plans have also become more popular because they enable consumers to do just that. While these benefits can be more expensive than traditional travel insurance, they address the need for more flexibility in travel plans.”

2022 is expected to be a strong year for travel, with potential for pre-pandemic levels to be attained

Looking at industry recovery, Borden said that Seven Corners is seeing recovery from the drop in travellers during the pandemic as travellers regain trust in travel but that awareness of the potential for disruption and other unpredictabilities is now engrained in travellers’ psyches. “As some travel restrictions ease and with availability of the Covid vaccine, people are gaining confidence in travel again. Even with that growing confidence, however, travellers are aware of how quickly plans can change,” she said. “They or their travel companions might get sick, a destination might change its entry requirements, flights might get cancelled or delayed due to illness or employee shortages. There is still a certain amount of uncertainty in travel, but travel insurance offers protection to minimise or counteract loss in some of those instances.”

Godlin said that, due to various factors, 2022 is expected to be a strong year for travel, with potential for pre-pandemic levels to be attained. “All indications show that 2022 will be a very strong year due to pent-up demand. Revenge travel is returning, international borders are continuing to open, vaccination rates are growing, and Covid cases are declining,” she told ITIJ. “As an industry, we’re seeing data that indicates it’s going to be a big year for travel – so big that it may rebound to pre-pandemic levels. And travellers are looking to splurge. We expect this heightened interest in travel to increase further as we get closer to the endemic stage of Covid-19.”

Insurtech trends

Susan Silfen, President of the US Travel Insurance Association (UStiA), noted: “One of the growing travel insurance technology trends appealing to the younger generation of travellers is the immediate electronic payment for approved benefits for the all-too-common travel inconveniences like a missed connection, baggage delay, flight delay, or an airline’s last-minute flight cancellation. Some travel insurance providers can track an insured’s flights, recognise a covered delay or cancellation, and automatically deposit the covered limit into an account or debit card, eliminating the need to file a claim with receipts.”

Seven Corners is leveraging technology to improve the claims process via a program called Claims Your Way. Borden told ITIJ: “Regardless of how customers choose to file, software is used to automatically assign a claim to Seven Corners employees based on experience and availability. This allows for adequate time and attention for each individual claim. Claims Your Way then sends customers an automated message with the name and contact information for the employee handling their claim and pushes the claim to the customer’s account on sevencorners.com, making documentation and tracking easy to access,” she explained. Not only does this enhance transparency, which is an ongoing goal for the industry, it also simplifies the process and improves customer experience. “Appeals and complaints regarding claims have decreased dramatically since the program launched,” Borden confirmed.

Benna said that, at Squaremouth, improvements have been made to help consumers quickly and accurately find the best policy for their concerns which, of course, is highly important in the age of new, Covid-19-induced concerns. “To do this, we built new ‘trending benefits’ into our system based on the most common concerns for our customers. With those new benefits, we added the ability to filter out any policies that don’t offer Covid-19 coverage, allowing our customers to easily identify the least expensive policy with the coverage they need,” he explained.

We need to enable advancement with an eye on maintaining the brand experience consumers want

Godlin emphasised that embracing technology is imperative to meet changing consumer expectations and to keep pace with competitors: “The trick for industry players is to determine the right level and types of technology to incorporate into their businesses. We need to enable advancement with an eye on maintaining the brand experience consumers want,” she said. She pointed out that, ultimately, ensuring a seamless and pleasant customer experience is key. “As we migrate to more advanced technology in the travel insurance industry, we must also understand that customer experience still demands human interaction. We can develop all of these innovations, but at the end of the day, it’s still our job to serve up what the customer needs in a way that’s efficient and user-friendly for consumers of all ages,” she told ITIJ.

At battleface, insurtech is being harnessed to facilitate customisation: “With our proprietary insurtech platform, we’re also allowing partners to custom build their own products for their customers, seamlessly integrated via API, A/B test products, and benefits that resonate with their customers. This leads to higher conversion rates versus traditional methods of just offering a pre-packaged product.”

Forecasting future patterns

Looking ahead to the trends that may emerge or develop in the coming years, Benna believes that demand for travel insurance will continue to grow and provided insight on the catalysts behind this:

• “More travellers buying cancellation coverage due to travel suppliers tightening their rebooking/refund policies
• More travellers buying medical coverage due to countries implementing entry requirements
• An overall rise in uncertainty among travellers and an increased awareness of the benefits of travel insurance
• A decrease in CFAR purchases as destinations largely remain open
• New policies emerging with specific wording for perils related to what we saw impact travellers throughout the pandemic, specifically, CDC warnings and travel warnings.”

Godlin highlighted a growing appetite for customisation, which is likely to continue apace: “Today’s consumers don’t just want specialisation. They expect it. In the coming years, I believe this trend will only grow. As travel brokers, we will need to continue to design tailored travel protection plans because travellers are demanding it from their travel suppliers. The best travel protection products are no longer ‘one size fits all’. Instead, they’re customised to both the travel supplier’s customer demographic and the travel experience itself.”

Spiteri forecasts that future trends will involve continued harnessing of technologies, as well as a growing emphasis on transparency: “Using data and machine learning to deliver relevant products to today’s travellers, ability to customise based on the traveller’s actual needs, tech-driven sales, Artificial Intelligence-assisted claims, and assistance services for instant response. But, most importantly, transparency,” he said.

travellers have new needs and wants regarding the cover they require

“Chaos breeds opportunity and the travel insurance industry is proving to be remarkably resilient in the face of chaos, Silfen told ITIJ. “The combination of tailored plan designs to meet the needs of a diverse population coupled with the use of technology to better understand the needs of the customer will make for a strong rebound with some lessons learned along the way. And add a little bit of good fortune with the testing requirements to the US on the back burner and the industry is posed for both rebound and innovation!”

A growing awareness of the benefits of travel insurance among consumers is a key trend in the US travel insurance market and, what is more, travellers have new needs and wants regarding the cover they require – many which have emerged as a result of the pandemic –  such as a growing desire for customisation as well as a need for flexibility that is manifesting as an increasing popularity of CFAR cover. Travel insurers are receptive to these changing consumer needs and behaviours, and the industry is placing renewed emphasis on customisation and the consumer experience while harnessing insurtech in the development of products and advances to meet consumer demand. There is no doubt that uncertainty remains, but travel insurance has the ability to protect against this and with US travel expected to be strong this year and consumers displaying a new appreciation for the benefits of travel insurance, the industry is set to move from strength to strength.