Must-have Embedded Insurance Products for Online Travel Companies

Embedded insurance for travel experiences is changing the face of the travel industry with many Online Travel Agencies and Airlines and travel companies integrating insurance into their businesses. Embedded insurance is about selling relevant and personalised insurance to the end customer at scale. It is sold through the customer journey of a third-party’s product or service (e.g. a banking app, an airline, an event ticket provider, a mobile network operator and many more). We look at the top embedded insurance products every travel player needs to know about.

Embedded insurance
provides the coverage people need, exactly when they need it for as long as they need it at an affordable price, a completely different concept when compared to traditional insurance offerings. Furthermore, today’s embedded insurance products are end-to-end digital and often fully automated (no involvement from the insured person after purchase, even at claims!), truly revamping the Protection Gap for an improved overall customer experience.

In this article we focus on the travel sector, zooming in on two of the most innovative embedded insurance products recommended for travel providers and booking platforms - Cancel For Any Reason (CFAR) and Delay Insurance.

Cancel For Any Reason (CFAR) Insurance

Cancel For Any Reason insurance adds an invaluable safety net to travel experiences. This solution is designed to protect and reimburse customers for ticket costs whenever plans change – unexpected or not - leading to booking cancellations – be it a flight or train ticket, concert or activity. ‘Any reason’ means full flexibility for the customer to cancel at any time without having to provide a reason, all completed with a single click. Not needing to provide proof or supporting documentation to justify the cancellation truly differentiates CFAR from traditional cancellation products, which come with a set of criteria the customer must meet and often burdensome forms to fill out to be eligible for a refund.

According to Companjon’s latest consumer research, Embedded Insurance: A Catalyst For Digital B2C Business Growth, a whopping 9 out of 10 customers, across five major European markets, nominated CFAR insurance as the number one protection, out of six possible travel-related insurance solutions.

How does Cancel For Any Reason Insurance actually work?

Let’s look at an example of how CFAR actually works. Bella, an Italian history student in Milan, needs to travel to Rome and explore the ancient city, as a part of her semester coursework. She books her train ticket through a leading online platform and adds CFAR insurance to her purchase, as she might have friends visiting over on those particular dates. Now Bella has peace of mind, that even if her plans change at the very last moment, she’ll be able to cancel with a single click, without having to provide any reason, and receive almost a full refund (up to 90%) of her ticket cost. In Bella’s mind, this is a small price to pay to keep all her options open. Without CFAR, she would have not had the confidence to go ahead with the purchase.

Delay Insurance

Today’s leading Travel delay insurance solutions for transport are end-to-end digital, fully automated, and completely hassle-free. Once the solution is purchased, there is no further action needed by the customer. Whether it’s a flight, train or coach service, on the day of departure, the journey status is monitored in real-time. The customers are notified about any delays, at the moment they occur, together with the respective compensation they are entitled to, all facilitated in a fully-automated way without human involvement. For example, the most advanced delay insurance solution for flights, in particular, gamify the whole experience, increasing the final compensation with every minute of delay, creating a truly unique experience. The final reimbursement is transferred to the insured person as soon as their flight takes off or lands (depending on whether the delay covered is on arrival or departure). Unlike traditional travel delay insurance, which requires a claim submitted by the customer and only pays out within a couple of weeks or even months, modern solutions truly alleviate the frustration that comes with delays.

Notably, according to Companjon’s latest consumer survey, 4 out of 5 European consumers expressed a strong willingness to purchase modern delay insurance (be it for a flight or a train), motivated by the hassle-free and completely automated compensation payout.

In conclusion, offering Travel Delay Insurance should be a “no-brainer” for airlines, bus and rail providers, and online booking platforms. Such solutions ease the stress that a trip delay brings, increasing customer satisfaction and differentiating the ticket provider, giving them an edge over competitors.

Embedded Insurance for Business Growth

The Cancel for Any Reason and Delay insurance solutions, ranking the highest amongst the customers when it comes to travel protection, unlock significant value for business within the travel sector. First, they bring a fundamentally different experience to the end customer across the whole end-to-end lifecycle of the insurance. These products are offered exactly at the moment when the customer needs them, offer bespoke coverage, and are easy to understand and purchase. Additionally, they eliminate completely the hassle and effort of claiming and pay out the compensation immediately. A significantly better customer experience can considerably improve the travel-service providers’ brand image, loyalty, and ultimately NPS scores. Second, the CFAR and Delay solutions demonstrate significantly higher conversion rates compared to traditional travel-related insurance, directly contributing to the provider’s bottom line through ancillary commission revenues.

With more than two-thirds of consumers saying that they would consider purchasing embedded insurance, there’s no denying that the market is here to stay. Establishing a partnership between a high-growth travel business and an insurance partner capable of building and underwriting flexible digital insurance products can unlock business growth, client retention and market differentiation opportunities.

To learn more about insurance for your business, read more here.