Our annual travel insurance dilemma

Each year my partner and I travel to Europe to see friends and family, indulge in the boundless culture, travel to new places… and some we’ve been to, and we always eat to our hearts content. This year will be our 5th trip in less than 3 years.

We usually take 4–6 weeks off so we can get the most amount of down time and family time. We also mix together places that we’ve seen before while trying to add at least one new destination that both of us have never been to before.

Trip 2018 — Croatia, Mallorca, Munich to name a few places.

Planning for this trip usually starts 4–5 months before we go. Visa’s, injections, flights, hotels, AirBnB, car rental, friend time, family time, medication, ferries, local currency and travel insurance must all be arranged or booked before we go. Each one of these is meticulously compared, checked, purchased and rechecked before we depart — except for travel insurance. The amount of time we spend on Skyscanner, Webjet, Expedia, trivago or Airbnb would be days in total, yet normally a few days before we go, we think about getting travel insurance — just in case something happens.

Most of the time while traveling nothing happens and we have a great time. However, over the years we’ve had various claimable events occur, often when we least expected it. Some of these include:

• Mastercard Credit card skimmed: taking over $800 from my partners account.
• Missed a connecting flight: due to AirBerlin being 2 hrs late leaving Berlin. This meant our connecting flight to Tokyo was missed and we spent 24 hours in Abu Dhabi in the middle of summer.
• Hire Car nudge: welcome to Europe’s infamous touch parking.
• Stolen Camera: taken from my backpack.

The face you pull when your credit card is skimmed.

While these things are terrible, and make you feel sick, we took each of them on the chin and remained positive knowing that on each trip we’d taken out comprehensive travel insurance. Surely we should be covered for each of these incidents? Right?

On the last trip, my partner and I each have a platinum credit card. We decided to try our bank’s complimentary travel insurance which is underwritten by Allianz. It was a great on-sell because it was free and fairly painless to set up. We didn’t really focus on whether it was a ‘basic’ cover or ‘comprehensive’ since as a glass half full person, I tend to focus on what an amazing trip it could be, not how terrible could it become. The credit card insurance did save us the usual $300-$500 for travel insurance for 4–6 weeks of traveling Europe.

I wont go into each of the incidents individually, but will highlight that for each incident, the travel company made it either really impractical to claim anything, the benefit wasn’t worth the effort, or our claim was about a small portion of what we expected to receive. The free insurance didn’t cover that much when you read the t’s and c’s and we didn’t realize the minute we stepped on a boat of any kind, (hello, I was sailing in Croatia & Mallorca) were weren’t covered.

In saying that, on previous trips that had claimable events, I was successful in a claim, however the funds arrived weeks after we returned back home and they offered a smaller portion to what I expected. This wasn’t very useful when you have car rental to pay for on the same day as the credit card skim.

On previous trips we did spend a money on travel insurance, but we faced the same problems. I would have paid double what I normally pay in order to get some kind of customer service that I’d expect from any provider of a digital product.

In reflection of my dealings with the above conundrum; travel insurance is constructed so it’s hard to deal with, hard to understand and hard to claim. The process is mainly paper-based with lots of human intervention required since you’re often talking to middlemen/ brokers as the communicator to the underwriter, so you never get the full picture. I’ve talked to others who have had positive, negative and mixed experiences with travel insurers, but all agree that the processes should be greatly improved.

A once in the lifetime journey is soured by the incidents I mentioned above, yet the real black-eye comes from dealing with insurance companies during and after the trip, if you have an incident. I know this, cause I had to go through it, and from these experiences, I now work for a major insurer currently helping them understand their users.

With every problem, there is an opportunity

Travel insurance is still in the dark ages.

People these days are into experiences, especially traveling and not buying houses or investments like the generation before. See what AirBnB is now offering and you’ll notice it’s not about the accommodation anymore, but the experiences you can have. The world has moved on from being product-centric to relationship-centric.

Major insurers rarely specialize wholly on travel insurance and usually offer a re-tooled insurance product as their travel offering while charging top premiums to cover their risks. The reason why there isn’t the investment in advancing travel insurance is due a few factors, but seasonality is a major reason why. Insurers can bank on you paying your car insurance each month and risk modeling is easy to profile. Travel insurance is peaky, seasonal and therefore harder to measure. (I have an idea to smooth this part over).

As far as product polish, sophistication or a point of difference, there isn’t real difference any between the major insurers since the core product is owned by a handful of companies and providers build interfaces on top. Rarely do insurance companies dig deeper than what region are you traveling? what dates are you traveling? and how many are going?

Travelers care about being safe, informed, on-time and immersing themselves in the culture, points of interest and the culinary options they don’t get at home. They are focused on the experiences that lie ahead and the memories they’ll create.

At best, travel insurance in its current form is an analogue product, using analogue processes, with a website front. There is little sophistication, no personalization and users are often covered for ‘Snow Cover’ even when traveling to SE Asia or offered ‘Cruise cover’ for a flight to Switzerland when you read the fine print.

And while the incumbents are using these dinosaur product offerings, it’s actually a rapidly growing market which last year hit $15bn, and is estimated to grow to $28bn by the end of 2022 globally.

I see a huge opportunity to create a new digital travel experience for the future of traveling safely, not just providing another analogue set-and-forget insurance product that bound to disappoint.

An experience that keeps users informed, is sustainable, transparent and provides value before, during and after the trip. Why are we offered snow cover for trips to Fiji? Why is the claim process complicated, paper-based and why does it take so long? Why isn’t it transparent? These things bug me.

This summer, as a insurtech passion project I thought I’d get back into the startup space. I’m building a prototype focusing on some of the points mentioned above. It will be mobile-first, using today’s technologies like geo-location, using REST API’s and extract data for customer learning and behavior learning. It should be simple to use, on-demand, sustainable, integrated, have no middlemen, and most of all, built on enhancing the experience of traveling safely, securely and being informed. ‘Delight’ isn’t a word on the radar, ‘customer-value’ is.

Insurance isn’t sexy, nor is this take on it meant to be — but it should impress the user by giving value on the subtle touch points needed. I’ll also look at the regular traveler model doing up to 5 trips per month domestically and aim to create an ‘invisible’ experience based on this type of pain point.

This should be a zebra b-corp, not a unicorn. Insurance companies aren’t build to be unicorns, so let’s see if this could work. Sustainable travel is a massive topic, so let’s see if we can bring that into the mix and offer a portion of the premiums to helping organizations tackle this — Boracay and Cinque Terre come to mind.

I’ll let you know how I get on and if interested in helping, reach out at [email protected] and I’ll add you to the Slack channel.

By the way, one could suggest this is a bi-product of the neobank focus I had last year, and I’d agree with it.

I’ll give an update soon to some of the progress being made.

A few shout outs for people in my circles who had helped me this year from time to time as friends, colleagues, sounding boards, queen wavers, helpers, challengers, cheerleaders, and fellow adventurers. Enjoy the break over the holidays. Bold&Resolute, Chris Saad, Kerry Esson, James Cameron, Brian Cooke, Gerd Schenkel, Kiran Kumar, Aleksandar Svetski, Sam Hobson, Eric Tsang, Edmund Insurance, Tom Blomfield, Simon Cant, Kevin Upton, Leonardo de la Fuente, Wes Hill, Manfred Neustifter & Paul Weingarth.

I also drew inspiration from the story by Ryan Badger. Worth a read.