Back in January, 93% of people surveyed by AllClear Travel Insurance said they planned to travel at least once in 2023 despite the cost-of-living crisis1. Amongst the over-55s in particular, heading overseas is proving popular this year, with a 50% increase in those looking to travel during the winter months2.
However, travellers are looking to cut costs, and worryingly, some are looking to do this by cutting out insurance3. A recent Aviva survey has found that 7% of money-saving holidaymakers plan to cut costs by not taking out travel insurance4. A separate study carried out by Sago Research UK in May this year revealed that 46% of those with medical conditions said they wouldn’t bother getting travel insurance for short-haul holidays5. The proportion of vulnerable holidaymakers considering safety in their holiday choices has fallen by 21%, with the prioritisation of price and value for money rising by 16%6.
The recent air traffic control failure that has caused widespread problems across Europe over the last few days has proven exactly why travel insurance is so important, with flights being cancelled and delayed, bags being left on the tarmac for hours - in some cases, during heavy rainfall – and widespread disruption7. Earlier in the summer, widely reported on wildfires in Greece, Italy, Tenerife, and on the other side of the world in Maui caused chaos and distress for many holidaymakers, leading to evacuations and emergency accommodation.
So, what can insurers do to encourage the 34% of holidaymakers looking to cut costs that cutting our insurance is not the way to do it?
Fortunately, this summer’s news articles will hopefully have done some of the legwork for you. Many people are not aware of all the risks they face when they travel without insurance and what exactly can be covered by obtaining travel insurance. Insurers can help to educate holidaymakers about these risks by providing information on their websites, in marketing materials, and through thought leadership. We would suggest flagging coverage of the following:
The process of buying travel insurance should be as simple and straightforward as possible. Insurers should offer a variety of ways to purchase travel insurance, such as online, over the phone, or in person. Insurers should also consider adding a range of payment methods, such as Apple Pay and Google Pay, to make the checkout process seamless and fast, reminiscent of the online retail experience that consumers have grown to expect.
Travelers are more likely to buy travel insurance if they feel like they are getting a good deal. Insurers should regularly compare their prices to those of other providers to ensure that they are competitive.
Providing returning or new customers with offers and discounts also provides a great incentive to purchase and has the added benefit of encouraging brand loyalty.
Insurers could also consider partnering with a travel company so travel agents and tour operators can help to promote travel insurance to their customers. Insurers can partner with these businesses to offer discounts or other incentives to their customers.
Customers need to be able to understand what is covered by their travel insurance policy. Insurers should clearly explain the terms and conditions of their policies in plain language.
If holidaymakers have a problem with their travel insurance policy, they need to be able to get help quickly and easily. Insurers should have a good customer service team in place to handle any issues that may arise and to answer questions.
Part of this is ensuring claiming is easy, with a 24/7 claims hotline or an easy-to-use online claims process. Equally payouts should be simple for customers too. Insurers should aim to provide customers with options for how and into what account they would like to be paid, ensuring the process is as smooth and fast as possible so that holidaymakers and travellers that are encountering an issue now do not have to wait months for reimbursements and payouts.
Insurers should offer personalised quotes and add-on benefits to their customers. This will demonstrate that the insurer is taking their individual needs into account, as well as appealing to the growing demand for personalised and tailored customer experiences that make the customer feel special.
Increasing productivity and providing seamless customer experiences are becoming more important when it comes to competing in the insurance space. Your payments are fundamental to providing customers with the quality customer journeys and interactions they have come to expect and the choices in payment and payout options that they want. Find out more about how payments can support your business or check out our blog post on why insurers should care about their payments.
2 Ibid.
3 Ibid.
4 Aviva
6 Ibid.