The changing face of travel insurance

There is strong demand for travel, but traveller anxiety has increased, and travel insurance must change to enable a better experience, one insurer says.

Following the Covid lockdown years demand for travel has soared globally, although traveller numbers remain below pre-pandemic levels.

Travel was a top priority for 87% of New Zealanders over the next year, according to a recent survey by insurer Allianz Partners.

But the survey also revealed a heightened level of anxiety, with 44% worried about flight cancellations or delays, and 34% concerned about their luggage going missing.

Forty-eight per cent were afraid of being scammed, while 26% were worried about personal safety and 25% were concerned about being a victim of pickpockets or theft.

The upshot was that 43% of respondents were more likely to purchase travel insurance now than pre-pandemic, and 77% said they would purchase travel insurance for their next trip, regardless of their destination.

Allianz Partners Asia Pacific managing director Vinay Surana said the nature of how people travel had changed, and so had their expectations of the experience.

They wanted greater ease and more assistance, and that offered an opportunity for insurers, he said.

“Insurance often has negative connotations, so we need to move the value proposition around it from being a reluctant purchase to something that people want to get because it adds to their experience.”

Currently, it was only people that made a claim, which was around 8% to 10% of customers, that experienced the value proposition, he said.

“That’s all about remediation, and we are the ambulance at the bottom of the cliff. We need to diversify beyond that to offer more to all our customers.

“It is about harnessing our experience and capability to improve their experience. We also need to move into the preventative space to try and stop things going wrong, although we are there to help if something does go wrong.”

Being able to provide that type of more holistic service meant everyone was happier, as more customers benefited without having to make a claim, and Allianz would not incur the same level of losses, he said.

“We want to make sure that we are on a seamless journey with the customer from the time they think about planning their trip until they return home.”

Surana said it required a change in mind-set, but focusing on enhancing the customer experience and prevention, rather than remediation, was the future of insurance generally. The best way to do it was with digital and AI technology, and by moving away from traditional products to platform-based solutions, which integrated services with partners, such as airlines and banks, he said.

One example of how the company was adapting its offerings in the travel space was its recently launched mobile travel companion app, allyz.

It acted as a one stop shop which offered pre-travel advice, helped plan itineraries, provided a place to store travel documents, and gave information on local services while travelling.

The app has now been launched in several European markets, and it will be introduced into the New Zealand market over the next nine to 12 months.

Some other examples were the digital health service, and the mental wellbeing app that Allianz already offered.

The digital health service gives customers access to options such as AI chatbot technology to check symptoms to see if further care was needed and teleconsultations with registered doctors.

The mental wellbeing app was part of its student safe policy, and offers personalised videos, exercises, and assessments, and four coaching sessions if needed.

Both aimed to help customers take better care of their health and wellbeing, and fitted in with the concept of helping to prevent issues from developing.

Surana said Allianz had been transitioning from a traditional productled company to a platform-based company for four years.

It was building capacity around tailor-made assistance services in travel and leisure, health and well-being, and cyber safety, and an aged care service was also being developed, he said.

Back in 2019, the company pulled out of the commercial motor, public liability and property insurance markets in New Zealand.

But it retained its other New Zealand insurance products, including its travel insurance business, and pet insurance.