The typical process customers will experience when making a travel insurance claim from a traditional insurance provider is made up of 13 or more steps over a period of 45 days, and likely long after they have returned from their trip. It is no wonder that travellers are increasingly looking to insurtech startups to provide better travel insurance experiences and products. Making use of a blend of customer-side synergies and big data, the Insurtechs listed below are turning the $1bn Australian travel insurance industry on its head.
What exactly are customer-side synergies and big data? Business consultant and Harvard Professor Thales S. Teixeira defined customer-side synergies well in his recent article “Disruption Starts with Unhappy Customers, Not Technology”. He explains that only when companies turn their focus to customers’ changing wants and needs can they effectively respond to digital disruption. Rather than concentrating on the technology itself and firm-side synergies, companies should be considering how technology can be the tool to create customer-side synergies. Travel insurance startup TravelCard have managed to achieve this by successfully deciphering how they can offer customers real-time travel claims through technology and data that previously had not been tapped into by other insurance companies.
Big Data. The phrase itself can be rather overwhelming, but the sooner you can get comfortable with it the better because it is undoubtedly driving the development of insurtech and a host of insurance startups. Not only is customer data an incredible source to learn about who your customers are, and adjust your marketing and products to match (this is available to businesses of all sizes); but it can be used to create AI algorithms that return answers at a speed no human can achieve. This is precisely how the likes of insurtech startups Huddle and TravelCard are able to offer same day and even real-time travel insurance claims to their customers.
As Teixeira points out in his article, new technologies come and go. The ones that consumers choose to adopt are the ones that prevail. So it makes sense that businesses looking to create new opportunities using technology should start with the customer first.
Real-Time Claim Payouts and Eliminating Out of Pocket Expenses
TravelCard set out to find out why half of Australians that could have made a medical-related travel insurance claim, hadn’t. Through their research they found that the major reason was too much paper work. This was closely followed by claims only being partially reimbursed, and long settlement times taking 3rd place. By addressing the three biggest consumer concerns, TravelCard have completely transformed the travel insurance business model. Supported by AI technology and a decade’s worth of data, TravelCard achieved this through enabling customers to make a claim at the time of event, and have the claim paid out immediately. They have successfully managed to reduce the travel insurance claim process to only 3 steps, and by paying claimants while they’re still travelling they have eliminated any out of pocket expenses.
Top Complaints Australians have Regarding Travel Insurance
Reducing Fraud to Rebuild the Trust between Insurers and Customers
Huddle have created their own proprietary algorithm using a combination of machine learning and artificial intelligence. By digitising almost everything, they are able to offer instant claims approval (in the majority of cases), reduce fraud, as well as reduce human error and bias; ultimately rebuilding the trust between insurer and client that has deteriorated on both sides over the years. Co-founders Jonathan Buck and Jason Wilby say they identify Huddle as more of a tech company because they’re so focused on continuously improving their platform. But they’re intent on making Huddle Insurance a personable experience, striving for social good as well as profits. They’re achieving this through giving back to charities chosen by their policyholders’, offering carbon offset credits with car insurance policies, and keeping investments out of fossil fuels and instead putting them into companies that are making a positive impact on the world. Transparency and social good appear to be a common theme among many insurance startups globally.
Bridging the Pay Gap
Travel with Jane
This unique Australian insurance startup is setting itself apart by doing their bit to close the gender pay gap. Travel Insurance Platform, Insured By Us, saw a business opportunity when it recognised that two-thirds of their travel policies were being purchased by women, despite insurance being overly targeted towards men. They then teamed up with Travel With Jane to create travel insurance products that put women at their focus. What could be more empowering to women than recognising Australia’s gender pay gap and giving women, as well as those who identify as women, a discount that matches the gap – currently sitting at 14.6%. Travel With Jane had initially given the discount an expiry date of March 2019. However given the 414% increase in sales, and that they’re still very much offering the discount, it’s proven a legitimate selling point for the travel insurance startup.