Whatever you call it — travel insurance, fintech, trip protection, peace of mind — the past several years have shown travelers the importance of having a safety net. That shift has led to new opportunities for travel brands to use insurance products to improve their technology, increase loyalty, build lifetime customer value, and drive revenue.
Discover the top trends that will define the travel industry for the coming year.
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The rise of so-called “fintech” products for the travel industry has led to more visibility among consumers of what most would recognize as traditional trip insurance. The reality is that whatever you call it — travel insurance, fintech, trip protection, peace of mind — the past several years have shown travelers the importance of having a safety net. That’s led to a sentiment shift: Insurance is increasingly being seen as an essential cost, and customers are willing to pay for better care.
In addition, travel brands are now recognizing new opportunities to provide full-service care for passengers and guests across every stage of the journey — which is having a buoyant effect on customer loyalty.
SkiftX spoke with Tom Trotta, vice president, sales & partnerships – USA at Allianz Partners, to dive deeper into how the pandemic has permanently changed customers’ expectations and how those shifts have led to new opportunities for travel brands to improve their technology, increase loyalty, build lifetime customer value, and drive revenue.
SkiftX: How have customer expectations changed with regard to insurance and trip protection in the past several years?
Trotta: At the risk of becoming a tired response, the pandemic was a really big turning point for consumers in the travel industry as a whole. Brands that showed their human side and worked with compassion really thrived. Consumers have become more loyal to the brands that gave them options, flexibility, and most of all, more certainty in an uncertain world.
That is really where trip protection shined, and it goes beyond just travel insurance and financial reimbursement. There’s been a consumer mindset shift from historically being focused on trip cancellation to the idea of having protection with all the services in place to keep people’s trips running smoothly. The companies that are pioneering in those areas with a customer-first focus are positioning themselves well to meet the next shift in customer expectations.
SkiftX: There’s been a lot of hype around fintech products — like canceling for any reason, for example. What’s the difference between buying fintech products and buying travel insurance?
Trotta: Whatever name it is advertised as, consumers are looking for solutions that give them more flexibility or perhaps something that just provides them with peace of mind. But travel suppliers have to ensure their customers are getting products that will be there to provide “follow through” when it comes to utilization.
As a highly-regulated product, travel insurance products are held to a high standard, with their state regulators representing consumers’ best interests. Some fintech products are sold as non-insurance products without review and approval by respective state regulators and, thus, may not have the same consumer protections as those embedded in regulated travel insurance products.
SkiftX: What are some examples of how brands can extend customer care across the traveler journey?
Trotta: Historically, travel advisors have been one of the few spots in the industry to think about customer care across the entire journey — being there in the dreaming and planning stages, through booking, and being “on call,” should issues arise for their most valued clients.
But things are changing, and travel brands are seeing the incremental value in customer loyalty in a new light. Historically, an airline’s duty of care ended once the customer passed through the arrival gate. But today, more airlines are establishing partnerships and developing platforms for whole-trip management.
When brands put taking care of people at the core of what they do, customers feel not only at their happiest but also at their most confident.
SkiftX: What are some opportunities to leverage personalization to improve customer care and travel insurance?
Trotta: Start with the recognition of customers as travelers with unique needs, not transactions. In many contexts, when people bring up personalization, their first thought goes to data and machine learning algorithms. But the reality is that personalization starts with empathy. Each of us is different, and frankly, each of us may act differently from trip to trip.
For travel insurance, personalization begins with understanding the different solutions that can be provided in each situation — the booking window, the length of the trip, trip components, customer’s prior travel experience (i.e. frequent traveler loyalty program status), the time of year of the trip, the end destination, the number of travelers on the itinerary, and more. These are the ultimate drivers in predicting what customers really want and providing a solution that is going to serve them best when they really need it.
SkiftX: What are some ways that technology has become integral in these efforts?
Trotta: Technology is a massive enabler of innovation, but you must also have the people and experience to get the most out of it. Behind the scenes, Allianz Partners has always pioneered innovation that redefines what travel protection can do to drive more customer value. For example, we were the first in the travel insurance industry to embed insurance into the booking paths of airlines, OTAs, event ticketing companies, and to use artificial intelligence to personalize insurance offers.
But it is also the right partnerships that take that technology to another level. Our organization has been set up to execute and deliver quickly through agile teams — meaning every one of our partners has a dedicated team supporting their business with experts in products, technology, project management, analytics and data science, marketing and optimization strategy, award-winning creatives, and more. Things can really move quickly with no functional silos to break down and dedicated knowledge centers in place.
SkiftX: How can brands partner better with insurers to provide these services?
Trotta: First, travel brands should start by seeking an insurer willing to be both a thought leader with them and a reliable partner, not just a product provider. Many travelers now see travel insurance as an essential part of their trip-planning process. We find working together with brands to solve challenges with the customer at the heart leads to the most beneficial solutions for both customers and partners alike. It is not just about making the sale, but also being there when customers need us most.
For more information about Allianz, visit AllianzPartners.com.