Technology Has Only Begun to Impact Travel Insurance

Travel protection may be one of the least exciting elements of the vacation purchase journey, but technology has radically reshaped the product and service delivery over the last five years, with even greater changes on the horizon for travel agents and consumers alike.

Today, travelers can avail themselves of a host of services that could not have been developed without technology. For example, airline passengers can request their insurance company track their flights, and if there is a delay that meets their plan’s terms and conditions, a claim can be automatically filed, and funds transferred to their bank account even while they are waiting in an airport lounge to depart.

“Proactive payments for some travel delays, digital payments made directly to debit cards, and a focus on claims automation have drastically altered the way our customers get reimbursed for covered travel situations,” said Dan Durazo, Allianz director, marketing and communications, USA.

“These innovations have simplified and expedited the claims process to put money back in travelers’ pockets faster than ever before,” he said. Many claims are now finalized and paid within a few days, and through the company’s SmartBenefits program, customers with a qualifying flight delay “can receive a payment without even lifting a finger,” Durazo noted.

In Canada, Travel Guard Group Canada, Inc. last year launched an app that allows Canadian customers (except Quebec residents) to purchase coverage in blocks of time through their iPhone, using GPS technology to track their whereabouts.

Despite the advancements, several experts believe more innovation is on the way, as underwriters and insurance companies use the internet, machine learning, and the massive amounts of data they are collecting to better structure and deliver products, services and maybe one day, even customized pricing.

“I think we are just starting to see technology’s impact on travel insurance,” said Stan Sandberg, co-founder of TravelInsurance.com, an online insurance aggregator.

For the last 4-5 years, he said, the industry has had to focus “a lot of attention and mindshare on the regulation side of the business. It was hard for insurance providers to focus on product development, so there was less of a focus on innovation.”

Sandberg noted how it was in April 2013 that Allianz Global Assistance first launched its TravelSmart mobile app. The tool provided international travelers with information on local medical providers, drug and first aid translations, emergency phone numbers and other services. It took four more years for the company to add the ability to file and track claims on the app.

“Technology has caught up with the way people are communicating, and the industry has integrated that with customer benefits like instant adjudication,” Sandberg said. “Now, because of technology, you can have money in your bank from a claim before the end of your trip.”

“Right now, what all of the large players are doing is trying to use technology to lower the level of effort on the customer,” said Beth Godlin, president, Aon Affinity Travel Practice. By making travel protection easier to use, it is making the whole category more accessible to a wider population, and encouraging more travel protection purchases.

Aon has reconfigured their entire claims experience so there are no forms. The customer is walked through a series of drop-down menus, and from start to finish, they can file a claim in less than eight minutes. “We’ve made the experience of using the product as simple and frictionless as possible. None of that could have happened without technology,” Godlin said.

What’s next?
With effortless, instantaneous client claims and payments, what can travel insurance companies do next for travelers?

“We are hearing about things like new pricing models that might take into account factors other than just age and trip costs,” said Sandberg. He said insurers are starting to use “big data” to better understand their liability based on the time between when a customer purchases travel protection and their scheduled departure.

“There is no question that the big players are using artificial intelligence (AI) and machine learning to understand clients as they shop for travel protection,” Sandberg said. “You already see some of the suppliers using that in their travel protection recommendation engines.”

For example, Allianz is working on the next iteration of SmartSample, which today uses machine learning to test and improve upon predictive models for generating online insurance offers, Durazo said. The new AI-enabled capability will consider up to 100 individual and trip data elements to create an insurance offer with benefits specifically tailored to each individual customer and their protection needs.

Godlin calls current AI applications “like trying to mimic the Netflix experience. Online sites are saying, ‘People who took your trip and look like you purchased this travel protection plan.’”

Agents will benefit more from machine learning as more travel insurers provide “white label” web pages that can do this customization at the agent’s website.

Allianz already offers QuoteMax, a personalized, AgentMax-generated quote box embedded on travel agency websites. Agents automatically get full credit for any plans purchased through the quote engine, “allowing agents to offer travel insurance while they sleep,” Durazo said.

“Just like an agent specializing in a niche doesn’t have to know 100 different brands of travel products, recommendation engines can help agents focus on the six protection plans best suited for their clients,” Godlin said.

To infinity and beyond
Sandberg said there also is talk about dynamic pricing factoring in the country a client is visiting. “Insurance carriers have claims info on every level. Maybe it turns out that more people slip and fall in Iceland than in the Bahamas, so might that be a variable that impacts premiums?” he suggested.

Travel Guard Group’s on demand travel protection is “very interesting and appropriate for Canada,” and has been tested in Europe as well, Godlin said. “We are watching it closely.”

But Godlin isn’t certain whether smartphone GPS tracking will have much of an impact on the development of products. “It depends on the market and what is driving the purchase of the product,” she said. In Canada, the big driver is medical, versus the U.S. where it is mostly trip cancellation.

“In the near future, we expect SmartBenefits to extend beyond flight delay monitoring to include train itineraries, missed connections, and baggage issues,” Durazo said. “Better real-time data will enable us to expand our proactive claims and loss notifications, so that in some cases, we could become aware of a travel disruption shortly after it occurs. By the time our customer learns about a delay, we may already be processing a payment or arranging a new flight.”

Allianz also is in the process of developing real-time travel safety and security alerts that would detect events like terrorist acts, transit labor strikes, and disease epidemics, and then notify impacted travelers through the TravelSmart mobile app. Artificial intelligence also may be used to detect and assess real health or safety threats, and to improve the system’s accuracy over time, Durazo said.