Digital transformation has the potential to radically reshape the world around us, from healthcare and government to banking and retail. But nowhere is the opportunity greater than in the travel sector.
Here, emerging technologies are already enabling travel companies to create highly personalized user experiences — driving value for their customers and shareholders.
Insurance is an often-overlooked proposition here: yet insurtech players are lining up to offer innovative digital services designed to improve the policyholder experience and drive loyalty.
Travel goes digital
According to the World Economic Forum (WEF), the aviation, travel and tourism industry has been “at the forefront of digital disruption” for several years. Yet its research suggests that the sector should “brace itself” for yet another wave of transformation.
“Travel providers are seeking stronger interactions with customers, while drastically changing operations, in pursuit of better insights around customer preferences and operational performance,” its report explains.
The smartest insurtech players are able to leverage the power of sophisticated predictive data analytics to provide dynamic premiums based on real-time data and actual, rather than perceived or blanket risk.
Patrick Young - Cover Genius
Smart devices and AI were singled out as offering up new opportunities to streamline operations and improve collaboration and asset-sharing between businesses.
However, the next wave of digital transformation will go beyond connected devices and AI, to include technologies such as virtual reality, blockchain, big data analytics, voice, 3D printing and many more.
Between 2016 and 2025, it’s expected to create up to $305 billion of value from increased profitability, as well as shift $100 billion in value from traditional players to newer, digital-savvy competitors, according to WEF.
There’s also the potential to drive wider benefits worth $700 billion from areas such as improved environmental sustainability, enhanced safety, and cost and time savings for customers.
One of the key characteristics that these emerging digital technologies share is in “connecting people with more information, people and experiences, more quickly than ever before,” according to a 2018 OECD report.
They offer a fantastic opportunity for online travel firms to build highly personalized experiences, delivering real-time information with which travellers can have the peace of mind to make key decisions on where to stay and what to do.
Insurtech disrupts
This personalization can extend into travel insurance, for which the market size is predicted to reach $35 billion by 2025. This sector is also undergoing radical digital transformation, producing innovative new platforms that could add tremendous value for OTA customers.
Some of the most interesting products are built around users’ mobile connectivity, geo-location, APIs, AI and data analytics.
For example, innovative insurance distribution platforms leverage the power of APIs to slot neatly into travel providers’ sites, providing coverage for customers seamlessly at the point-of-purchase.
Even better, insurtech providers like Cover Genius offer customized policies dynamically bundled from a large pool of underwriters. Country, currency and language can all be personalized with geo-location — offering coverage for car rental, lost luggage, flight cancellations, and even mobile devices.
Geo-location capabilities can also be used to offer policyholders relevant add-ons and upgrades as their geographical whereabouts change.
Think winter sports coverage if they’re in the vicinity of an Alpine ski resort, or safari insurance if they’re in a particular part of Africa, for example.
Smart Delay coverage is another great example where flight data and customer data come into play to offer instant reimbursement in case a flight is delayed. Insurtech today can offer Flight Delay products that can automate the process in real time from start (quote and bind) to end (claim payment) in real time.
Once the systems detect the delay, customers get a text to notify them that their instant payment is ready, in any currency and preferred payment method.
The smartest insurtech players are able to leverage the power of sophisticated predictive data analytics to provide dynamic premiums based on real-time data and actual, rather than perceived or blanket risk.
This can save the insurer and policyholder money in the long run, and further enhances the user experience, with quotes predicted, costed and seamlessly delivered direct to their personal device.
Continuing the user-centric theme: API-driven platforms featuring microservices architectures are another insurtech innovation that can have a major positive impact on the customer experience. In this case, they accelerate payment processes for claims into real-time.
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Cover Genius' global insurance distribution platform enables partners like Booking Holdings and Etraveli to customize, add-on, and embed insurance for the needs of any customer going anywhere who is doing anything.
Saving lives, and the planet
There are even more scenarios where technological progress offers opportunities for insurers and OTAs.
Consider emergency medical treatment: online consultations have greatly reduced traditional barriers to provision, providing peace of mind to policyholders during a time of potentially great stress.
Insurers can also send alerts to their customers about the best places for specific treatments, if there are problems communicating with local hospitals or cultural bureaucracy slows things down.
There’s even a role for insurtech to play in helping to drive more sustainable tourism. Guided by real-time data, insurers could direct customers away from the most crowded spots at peak times, minimizing congestion-related pollution.
That might be one for the future, but the capabilities to offer such a service exist today.
Insurtech platforms open up a wealth of new opportunities: for online travel providers, insurers and their customers. We’re only just getting started.