Since March 2020, consumers have added protection products to their purchases at a rate of 6 times more often than they did prior to the pandemic. Shocking? Not really. For those of us in the insurance industry, we know that when people become more cognizant of risk, they purchase more insurance. Throughout history, we've seen this phenomenon. Following the horrific attacks that occurred on September 11, 2001, there was a major spike in purchase rates on different products like travel insurance, as customers became more aware of the risks involved in traveling. However, we also know that when it comes to insurance, the public's memory can be as long as that of a goldfish. Long term, as the insurance-prompting events were further in the rear view mirror, people eventually forgot the need to protect themselves and purchase rates even out. So, this begs the question: Will the increase in purchase rates that we've seen during COVID-19 be a "new normal" for insurance, or will this just be a trend of the times that people will eventually be desensitized to? To better understand consumer sentiments toward pandemic-related travel insurance and claims experiences, my company asked Momentive.ai to conduct a survey of 6,000 U.S. travelers. The data shows travelers are unhappy about traditional insurance policies and processes. |

Dissatisfaction reflected by -26 Net Promoter Score (NPS)

As seen in the first slide above, the average post-claim NPS for customers was -26, regardless of where they purchased their protection from. Given that most companies strive for an NPS of +50, this score shows that customers are having really poor claims experiences for a number of reasons. Customers complain about slow claims processes that are too analog, claims payments made by mailed paper checks rather than direct deposit payments, or claims simply being denied. In fact, of those surveyed, almost 30% of travelers who made pandemic-related claims were NOT covered, despite having purchased the insurance policies believing they were being provided pandemic-related protection. While the lack of coverage is clear in travel, it's not limited to the travel industry alone. The pandemic brought many claims by small businesses who suffered losses as a result of the disruption to their businesses. You might recall that in March of 2020, insurers were called before Congress to answer for the lack of coverage being provided to their insureds. Congressional members even wrote to insurers: "We urge you to work with your member companies and brokers to recognize financial loss due to COVID-19 as part of policyholders' business interruption coverage." As an industry built to protect customers and keep them safe, it is clear that in the wake of one of modern history's most disruptive global events, the legacy insurance industry has failed to meet its customer needs. |

Future preferences for purchasing travel insurance

Insurance has always been treated as a "second step." To protect oneself, you must make a purchase and then seek out a third party to provide protection. As customer's look to travel again, the majority (61%) would prefer to get their insurance directly from a travel provider or agent because of convenience. Customers want the ease of buying protection while they're purchasing tickets for their trip. In fact, customers are more likely to book that trip if they are also able to protect it in the same transaction. When asked to evaluate their most recent claim, customers from the U.S. who received free travel insurance from their credit card rated their experience with a post-claim NPS of -35 with an average completion time of 16 days. Customers noted that these experiences could be improved by faster claims processing and payments. In fact, this study showed a direct correlation between NPS and resolution time for claims, suggesting that claims backed by faster payments, clearer policy wordings, online status updates, online filing, and avoidance of data re-entry can all increase satisfaction rates. |

Lessons for the future

To address the gaps and frustrations that exist in the insurance sector — as shown by the above survey — everyone needs to look at how to best maximize customer convenience. For travel (and many other industries), that means using data to understand price sensitivities and create products that meet the direct needs of the consumer booking their trip rather than taking a "one-size- fits-all" approach. So, at the end of the day, we may not have a definitive answer as to whether the increased attach rates will remain the "norm." However, it is clear that insurers can do a much better job ensuring that the increased purchase of insurance does become the new norm by offering a convenient, hassle-free experience that puts the customer at the core of everything that is done. Darcy Shapiro is chief operating officer of the Americas at Cover Genius, the insurtech for embedded insurance that protects the global customers of the world's largest digital companies, including Booking Holdings and Intuit and Intuit and XCover is also available at Amazon, eBay, and Shopee. In her role, Darcy is responsible for leading the operational functions of Cover Genius and oversees the company's MGA licensing structure across 50 US states, 10 Canadian Provinces, and multiple LatAm regions that are critical to the success of Cover Genius' global partnerships. Opinions expressed in this article are the author's own. See also: |

• Travel insurance policyholders' top holiday trip questions
• These credit cards have the best travel insurance benefits
• A quick guide on when to buy travel insurance