Offering Travel Insurance to Groups Can Boost an Agent’s Incomeby Richard D’Ambrosio /
Travel agents love groups because of the prospect to boost their income by sending multiple travelers on vacation together. What many agents overlook, however, is the income they could earn by providing group travelers the opportunity to add commissionable travel protection coverage to their purchase.
The law of numbers is simple and enticing. If half of a group of 40 middle-age travelers, paying $2,500 each for a cruise cabin berth, purchase a mid-range travel protection plan commissionable at 25%, that’s upwards of $750 in commissions to an agent. Increase your close ratio to three out of four, and your commissions are over $1,100.
“Agents who don’t promote travel insurance to their groups are leaving money on the table, and setting the stage for potential interruptions to the group’s vacations,” said Cory Sobczyk, vice president business development, travel, at Arch RoamRight Insurance. “The same law of numbers that can make group travel insurance sales a solid revenue stream, increases the likelihood something will occur on a group trip that travel insurance would cover.”
“The bottom line is, there is nothing as lucrative on a margin basis,” said Lynda Phillippi, owner of Renaissance Travel and Events, in McMinnville, Oregon, who works with Travel Insured for group coverage.
Added layer of protection
Then there is the added layer of protection the agent sells in for the entire group.
“The dynamics of group travel, especially the impact on everyone if something goes wrong with just one traveler, makes travel protection an ideal offering for group trips,” said Isaac Cymrot, vice president, industry relations, at Travel Insured International.
“It’s really important. I have never had a big group where something hasn’t happened,” said Carol Rowland, CTC, principal and director of tour operations, at Recess 4 Grownups Travel, in Atlanta, Georgia. Rowland books 2-3 groups a year on average, and has five coming up in 2020.
On a trip with 20 travelers last year, “one of the ladies, three days before leaving, fell and fractured her nose and couldn’t go. Something always happens to somebody,” Rowland said. Three years ago, before a Holy Land trip, five members of one group canceled during the final weeks before departure, she said.
Group plans typically require a minimum of ten insured travelers who have a common destination and travel dates. Individual travelers looking to add on a few days before or after the trip also can purchase under the group’s plan.
Companies like Travel Insured have group sales and servicing teams that work with travel agents specializing in groups, as well as small tour operators. They will provide a variety of marketing support, including co-branded materials that agents and pied pipers can use during presentations, or attach to their group travel registration websites.
Travel Insured also has a compliance team to review regulatory issues. “We recommend that any advisor take advantage of them through their account management team, to review their materials to ensure that their marketing fits the group’s needs and is in compliance,” Cymrot said.
Travel Insured will even provide a special URL link that agents can embed on their website or in an email directing travelers to a page where they can purchase their coverage. Commissions are tracked through the link, said Bud Geissler, Travel Insured’s national group sales account manager.
The same, but different
For the most part, group travel insurance offers the same coverage at about the same price (6%-7% of the total trip cost) of individual plans, with some variations. The biggest difference is that the age of a traveler has no material impact on their premium price or coverage.
“For seniors, Baby Boomers, very often they can find the group travel plan is more cost-effective than pricing out an individual plan,” said Stan Sandberg, co-founder of TravelInsurance.com, an online insurance aggregator.
This is big for Rowland, who specializes in religious heritage tours that tend to attract older clients.
Second, as long as a traveler purchases travel protection before their final payment, companies like Travel Insured will cover pre-existing conditions. (Arch RoamRight covers pre-existing conditions in group plans, as long as coverage is purchased within 21 days of the first trip payment.)
Since not all of an agent’s group will sign up on the same day, make their payments on the same schedule, etc., “a group plan will accommodate bringing people onboard at different times. That makes it easier for the tour leader to administer,” Sandberg said.
Additionally, some group plans will allow travelers to purchase medical and damaged/lost baggage coverage right up to date of departure.
Group travel tailor-made for travel protection sales
Because group trips have such a long lead time before departure, they are tailor-made for periodic travel protection sales communications that increase the likelihood a client will purchase it.
Rowland has a church group leaving for Ireland in May 2020, priced between $4,501-$5,000 per person. The Travel Insured group plan rate is $319 per person, offering coverage for trip cancellation/interruption, missed connections, baggage delays, and accident and sickness medical expenses, among other things.
Rowland also is offering participants an upgraded plan (at $478.50 per person) that includes Cancel for Any Reason coverage with reimbursement for 75% of the nonrefundable trip cost.
In an email she sends out when a traveler makes their first deposit, she instructs the client that travel protection can be purchased right up to final payment.
“It is best to purchase travel protection at the time of tour deposit since some benefits are time-sensitive,” she writes to her clients. “As we add air arrangements in the future, it will be necessary to adjust the coverage amount upwards to ensure all your non-refundable costs are covered. We’ll provide information about that as appropriate.”
In eight days, if they don’t buy travel protection, they receive another email from Rowland. “At this point, typically 40-50% of the group have purchased. As we move along, I’m sending reminders, getting 10-15% more of the group insured,” Rowland said. (Rowland’s email campaigns provide at least 5-6 chances for her group travelers to purchase travel protection before departure.)
A month before final payment, if they haven’t purchased travel protection, the final email reminds the client that the trip is non-refundable, for any reason. “That email usually boosts me up to 80%-85%. After that, I'm sending out waivers they’re required to sign.”
“There’s definitely a higher conversion rate at final payment,” Sobczyk at Arch Insurance said, “because their money is nonrefundable and on the line.”
Get your pied piper onboard
Another important dynamic in group travel protection sales is the role of the tour leader, or pied piper. “That individual is a trusted colleague. Their passion for running is why they’re leading the group to a destination marathon, or a culinary expert taking the group on a foodie tour,” said Geissler.
“They’ve traveled before, and can advocate for people protecting their investment, how they have seen things on the road, and why coverage is extremely important to enjoying the trip,” Geissler added.
“We see a lot more success with smaller tour operators, religious groups, church groups, when there is a pied piper who says, ‘Hey everyone, look at this. We can get great coverage,’” agreed Sobczyk at Arch RoamRight. “From a marketing perspective, that leads to a greater success.”
“Peer pressure definitely plays a part,” Phillippi said, “especially when one or more participants talk about the fabulous deal to protect your investment. When ‘everyone is doing it,’ it becomes an easier sell.”
Still, Phillippi, keeps “a handful of real-life horror stories handy for anyone on the fence.”
Insurance helps advisors and pied pipers, too
While so much of the value of travel protection focuses on the traveler, it can be equally important to the group leader and/or travel agent, because of the extra support travelers in distress receive in the destination.
“If you have a travel delay issue, you don’t have two people trying to get back from Rome – it may be 40 people,” Geissler said. Everyone having travel protection for rebooking flights could smooth out what might otherwise be a difficult situation. “That could be huge for the agent.”
“If someone has an illness or accident on the trip, they’re using up the resources of the tour director to help them, and that can affect the entire group,” Rowland said. With medical assistance coverage, that traveler could have the expertise of the travel insurance company’s medical director and customer service staff.
Additionally, Rowland said, travelers make decisions based on the cost to them individually. “If something happens while you’re in another country, it’s really a good idea to go to the hospital. If they don’t have insurance, the client might not choose to, and that could impact the group proceeding on the trip. If the client has travel protection, they’ll make a more logical, intelligent choice.”