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India InsurTech Thought Leadership

Embedded travel protection enabling travel companies to offer personalized experience

What problem are you solving with embedded travel protection?

As travelers prepare for their upcoming trips, travelers prioritize security and a reliable safety net for their transactions more than ever. Traditionally, travel protection has frequently resulted in subpar customer experiences, especially when acquired through conventional or third-party avenues like benefits from cards.

The travel and airline industry is tied to a lot of legacy technology that has been built upon over many years. They’ve talked about innovation and offering more convenience to their customers to make travel easier, but the reality is very costly to change. To establish a good relationship with customers, protection measures must be personalized, flexible, and easily accessible. The integration of solutions directly into the booking process represents an innovative strategy for travel companies to deliver customer-centric experiences where consumers can unbundle products and choose what’s relevant, and allow companies to unlock revenue opportunities by offering different protection bundles. There isn't just one magic ingredient that gives customers what they need - it's all about having very transparent products.

How does embedded travel protection help customers as well as OTAs?

We believe protection should be simple - that is an innovation in itself. From straightforward policy wording to instant claims payments in one place, customers need a seamless experience without obstacles - both online and offline. When it comes to claims, OTAs want their customers to enjoy less complexity and more transparency.

Today’s customer is digital-first and wary of travel interruptions. As per a survey by ICICI Lombard General Insurance, demand for travel insurance policies increased in FY 21-22 compared to pre-covid levels in FY19-20. This means that there is an increased need for travel insurance to protect against unforeseen circumstances such as medical emergencies, flight cancellations, and lost or stolen luggage. Not only does travel insurance provide travelers with peace of mind, but it also contributes to India’s GDP. India’s Travel Insurance Market is growing at a CAGR of 17.65% and is estimated to be USD 892.29 million in 2022. Further, it is expected to reach USD 2011.25 million by 2027.

As such, customers want convenient, tailored protection delivered in the right place, at the right time and the right price. They want protection options embedded directly in their customer journey where they can choose what is right for them and that can be accessed just as easily on their laptop, as their phone or their smartwatch.

When it comes to their travel protection, unanticipated illness or bad weather can throw a wrench into a traveler's long-awaited plans. Travel companies often provide customers with standard, one-size-fits-all policies that prove inadequate in safeguarding them during crucial moments. A report on Embedded Travel Insurance, commissioned by Cover Genius and conducted by, uncovered a global trend: 20% of customers who submitted claims for pandemic-related reasons found themselves without coverage, despite having acquired travel insurance explicitly for pandemic protection.

By working with an embedded insurtech, travel companies can bridge this gap. For example, some of the world's largest travel companies and airlines offer customers an extra layer of flexibility with ‘Cancel For Any Reason’ (CFAR) protection embedded within the booking path. CFAR protection gives customers refunds for cancellations up to a fixed period of time, backed by instant claim payments. Travelers can enjoy peace of mind knowing their trip is protected no matter the circumstance, enhancing the customer experience and giving them more reason to book. Another example is our Delay Valet offering that analyzes real-time flight data to give instant, fully automated gratification to travelers. Compensation can be in any form including cash, lounge passes and/or flight credits. Customers benefit from quick resolutions without hassle, while travel companies boost satisfaction, unlock re-engagement opportunities and increase brand loyalty.

What is the role of technology in enabling the right travel protection?

With delays and cancellations becoming more commonplace, the right protection can make the difference between a minor inconvenience or a ruined trip for a traveler. While the demand for travel protection is growing, according to the findings by Policy Bazaar, only 25 percent of Indian travellers going abroad buy travel insurance well in advance. At the same time, the majority prefer to purchase it within the last three days before the journey commences. While customers understand the importance of travel protection, the lack of accessibility and awareness can contribute to their procrastination.

Insurtechs can use real-time flight data to identify delays and cancellations and enable travel brands to offer customers automatic compensation in any form including cash, lounge passes and flight credits. With customized solutions that meet their customers’ needs, travel brands boost satisfaction and differentiate themselves from competitors who offer singular products. These solutions can be dynamically bundled and unbundled, so customers add only the protection they need to their itinerary and avoid overpaying unnecessarily.

Artificial Intelligence isn’t just a buzzword for us - we use it to help companies better understand their customers and adapt accordingly. AI allows for a constant and dynamic review of what consumers want, what they are choosing and - as a result - being able to anticipate and cater to their real-time needs.

Do you think there’s scope to increase revenue opportunities for OTAs when they partner with insurtech?

Our Embedded Insurance Travel Report, conducted by and commissioned by Cover Genius, found that 69% of Indian travelers are highly interested in purchasing protection directly from OTAs, travel providers and airlines. This signifies the opportunity for travel players to realize the benefits of embedding protection in the booking path.

An embedded insurtech can enhance the protection offerings of travel companies by providing easily understandable policies, optimized pricing, data-supported product recommendations, streamlined claims processes, and immediate claim payments. These advantages contribute to a more seamless and enjoyable customer experience, leading to increased attach rates for travel brands. For instance, Turkish Airlines witnessed a 400% surge in attach rates upon introducing embedded protection, fortified by user-friendly features and pricing experiments. Similarly, Icelandair observed a 3.8x increase in passengers opting for protection compared to the previous period.

The additional ancillary revenue generated enables travel brands to introduce other value-added services, enhancing the overall customer journey and ensuring a top-of-mind presence for future excursions. These may include improvements to existing offerings like airline loyalty programs or new integrations to incentivize customers to book through their platforms. Beyond protection, many travel companies are exploring innovative fintech products to enhance the payment experience. Buy Now Pay Later (BNPL) options and price protection features provide customers with unprecedented flexibility, empowering them to book the trips they've been planning.

Today's customers demand comprehensive and transparent experiences from travel brands. Those seizing this opportunity and adopting an innovative approach to protection, coupled with enhancing offerings through value-added services, are well-positioned to attract customers and foster brand loyalty in the years ahead.

Author: Gourav Agrawal Director, Partnerships, India, Cover Genius

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.

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