Can insurance be an
e-business opportunity?

The online market is booming, as digitalisation enables purchasing practically everything at a click of a button. Total web-based travel sales are set to exceed $694 billion, with e-commerce reaching a value of $3.5 trillion. Inevitably, more and more e-businesses are competing over consumers' wallets, pushing them to find creative ways to stay ahead of competition and secure new revenue streams.

This reality calls for e-businesses to enhance their appeal by offering a delightful customer journey with a wide range of attractive products. Insurance is a great example of an ancillary product that can generate additional revenue, especially among travellers, who are naturally expecting to buy insurance as well.

Yet, can e-businesses successfully sell insurance without being certified or have expertise in the field?  Can they really build and deliver insurance products that improve the customer experience?

To do so, challenges have to be overcome, particularly closing the gap between today’s predominantly traditional insurance products and millennial preferences for personalised, transparent and hassle-free experiences. This means seamlessly integrating insurance products into the customer journey, abandoning the one-size-fits-all approach and creating a fast and automated service; similar to the way any other online product is purchased by millennials.

Great strides are already being made in these areas with the use of fully automated insurance-as-a-service platforms. Such platforms enable e-businesses to control the creation and distribution of insurance products offered in their customer journey, without having to worry about regulation, underwriting, policy management or even compensation when needed.

Furthermore, by using these platforms, e-businesses can easily test the performance and value of the insurance products they've created, making sure their consumers are getting a relevant protection, at the right time and for a real need.

By expanding their offering to include complementary insurance products, e-businesses can:

  • Achieve market differentiation that places them ahead of the competition.
  • Deliver superior-value insurance options that are likely to see higher uptake, thereby surpassing the relatively low conversion rates of existing ancillary services.
  • Gain consumer loyalty by providing a delightful experience with protections that address consumers' specific needs at critical moments.

This expansion of e-business offerings will enable consumers to purchase products in one place and streamline their shopping journey. It goes a long way to fulfilling the millennial requirement for simplicity and personalisation, creating enriched experiences that reduce customer churn and increase loyalty. And it bolsters the opportunity of tapping into millennial income, which is on track to top $4 trillion worldwide by 2030.

About the Author
Elana Marom is a full stack marketer who believes that marketing is about being present, relevant and adding value, alongside understanding how customers want to buy and helping them to do so. As Director of Marketing at Setoo, she’s leveraging her extensive marketing experience in start-up and enterprise environments to raise awareness about the paradigm shift evolving in the insurance industry and drive business growth.


Can flight delay insurance make us happier travellers?

We all want to be protected when travelling. Consumers are tired of flight delays and all the inconvenience, wasted time, incurred losses and additional expenses they entail. We also want positive experiences, particularly when it comes to compensation. Consumers are tired of long and tedious claims processes; compensation failing to take into account additional derived losses; and rigid travel insurance policies that are not tailored to individual needs.

We want flight delay insurance to be personalised and relate to consumer-specific behavior, needs and preferences, as well as offer immediate and automatic compensation.

When booking a flight, consumers get offered various add-on services such as car rental, extra luggage, special meals, better seats – and also insurance. We expect the insurance offering to be attractive and relevant just like the other products offered to us in the customer journey.

This means flight delay insurance that’s built and priced according to individual travel arrangements and potential loss. A delay means something different for someone travelling on a 1-day business trip, as opposed to a family heading out on vacation with a low-cost carrier. Hence, the flight delay insurance offered to these travellers needs to be different in terms of price, cover and compensation.

As defined by IdeaWorksCompany “revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience”. Bespoke insurance not only delivers consumers a better experience; it also provides a valuable ancillary revenue stream for the online travel agents that are offering the insurance.

Flight delays cannot always be avoided; however, the way such unexpected events are handled makes the difference between negative and positive customer experiences. By offering personalised, transparent and claims-free insurance, online travel agents can build loyalty among their travellers, safeguard their reputations and create a valuable stream of ancillary revenue.

And yes, albeit the delay, that will make us much happier travellers!

About the Author
Elana Marom is a full stack marketer who believes that marketing is about being present, relevant and adding value, alongside understanding how customers want to buy and helping them to do so. As Director of Marketing at Setoo, she’s leveraging her extensive marketing experience in start-up and enterprise environments to raise awareness about the paradigm shift evolving in the insurance industry and drive business growth.


Impossible to connect? Think again.

On July 7th 2005, I was traveling from Tel Aviv, Israel to Manchester, UK. Since there were no direct flights on that date, I selected a flight from Tel Aviv to London Heathrow with one airline; and a connecting flight from London to Manchester with a different airline. The 3-hour stopover in London left me ample time to collect my luggage and check-in for the local UK flight. (In those days building one’s own flight schedule with different airlines, did not yet have the fancy name –virtual interlining.)

Unfortunately, July 7th 2005 was also the day of the London underground bombings. London airports had been temporarily closed down and our takeoff from Tel Aviv was delayed by 6 hours. When I landed in London, my connecting flight was history, my ticket was worthless, and Heathrow airport was closing down for the night. I know this is an extreme example for a missed connection. Still, it happened, and no-one was prepared to compensate for taxis, hotel, new flight plans, etc.

Driven by the massive growth of low-cost carriers, globalisation and the evolution of technologies, more and more travelers are adopting virtual interlining, which addresses the journeys of passengers travelling on connecting, but non-related flights i.e., with different airlines. As consumers, this is great news. It means having the ability to tailor the most cost-efficient, optimised flight schedule.

However, as opposed to regular connections, with virtual interlining travelers are on their own, and if they miss their next flight the airline considers them a no show and pays no further attention to them. Not to mention covering for the cost of flight changes, hotels and additional transportation expenses. Online travel agents could address this issue by including missed connection coverage in their virtual interlining packages. Today, literally all travelers expect to be able to buy travel-related insurance at the click of a button, and missed connection is no exception.

The most appealing types of insurance offerings are personalised, tailored to consumers’ specific concerns and claims free. To enable such an insurance experience, online travel agents need to offer insurance products that leverage machine learning techniques alongside parametric capabilities. Similar to rain protection insurance, missed connection guarantee can also be dynamically priced to ensure it is optimised per consumer, and does not eliminate the price advantage of virtual interlining.

Finally, if something goes wrong compensation and assistance is immediate, turning a missed connection incident into an opportunity for a great connection with consumers – a moment of faith and appreciation to the online travel agent.

About the Author
Elana Marom is a full stack marketer who believes that marketing is about being present, relevant and adding value, alongside understanding how customers want to buy and helping them to do so. As Director of Marketing at Setoo, she’s leveraging her extensive marketing experience in start-up and enterprise environments to raise awareness about the paradigm shift evolving in the insurance industry and drive business growth.


Empires on edge? Time to focus right and grow

The Phocuswright Europe 2019 Empires on Edge event last week was an eye-opening and rewarding experience. One of the main topics discussed was “New Experiences: How tours and activities disrupt the European tour operator market and challenge destination marketers”. From my point of view, that’s because the disruption is accompanied by the need for millennial-friendly insurance products, which are aligned to the disruption that the travel market is undergoing.

First consider the statistics. European consumers are focused on leisure travel. The percentage of adults who travel annually in Europe’s three largest markets is 59% in France, 61% in Germany, 60% in the UK. An annual growth of roughly 3% in Europe’s travel market will deliver a €320 billion market in 2022.

That’s a huge potential market for e-businesses such as OTAs to grow. By leveraging the right solutions and technologies that deliver the best experiences to consumers, any online interaction can also be an opportunity for an insurance transaction, thereby monetizing the market opportunity and ensuring a win-win-win situation for consumers, e-businesses and insurers.

Why are such online insurance transactions a win-win-win for all? For consumers, they are simple and trustworthy solutions to real travel concerns, providing worry-free and hassle-free insurance with immediate compensation; and most importantly no need for any claims process. For insurers, they offer a new distribution channel – automated insurance processes that maintain full control of possible risks and eliminate the possibility of fraud. And for e-businesses, they generate ancillary revenue and improve conversion rates alongside enhancing consumers’ loyalty.

Phocuswright was a great place to share ideas and gain insights. And for us at Setoo, it was rewarding. Winning two awards – Travel Innovator of the Year and Homeaway Travel Innovation – proved to us that we are “focused right”. It confirmed that our mission to empower e-businesses to turn insurance into products consumers love is exactly what the market is demanding, enabling innovative OTAs and other e-businesses to create a delightful insurance experience for their consumers through simple, personalized and claims-free insurance products.

About the Author
Elana Marom is a full stack marketer who believes that marketing is about being present, relevant and adding value, alongside understanding how customers want to buy and helping them to do so. As Director of Marketing at Setoo, she’s leveraging her extensive marketing experience in start-up and enterprise environments to raise awareness about the paradigm shift evolving in the insurance industry and drive business growth.


Why won’t they buy?

Millennials are rapidly becoming the largest group of spenders, who are focused on shopping for experiences over purchasing random products. Furthermore, reviews of Gen Z buying patterns and their preference for online purchasing, indicate that the demand for experiences is only going to grow.

Now is the right moment for e-businesses to catch the wave and boost ancillary revenues, by offering millennial-ready insurance experiences with products that protect consumers from unexpected events, provide support when things go wrong and offer immediate compensation with no claim required.

But are today’s insurance products geared to the demands of consumers? Are millennials buying insurance?

Take travel-related insurance products as an example: The travel industry has evolved to meet the modern consumer’s demands for unique, delightful and exciting holiday experiences. Just last year, British holidaymakers have travelled more than any point in the past five years, with new destinations and niche, authentic experiences becoming the norm. Nevertheless, traditional insurance products offered to millennials, are not in line with their expectations for a personalised, reliable and hassle-free insurance experience.

From consumers’ viewpoint, existing insurance offerings:

  • Oftentimes fail to address their real risks and concerns.
  • Entail reviewing complicated and unclear insurance policies.
  • Require a long and frustrating claims process.

This is why millennials avoid purchasing protections, such as insurance against flight delay and cancellation, missed connection, bad weather and lost luggage. In fact, according to ABTA, 25% of holidaymakers travelled abroad uninsured in 2017, which was an increase from 2016. And as many as 38% holidaymakers travelled abroad in 2018 without suitable travel insurance or any insurance at all.

How can this trend be reversed, how can e-businesses cash in on the opportunity and grow?

E-businesses are uniquely positioned to deliver their consumers a new insurance experience. This means no more one-size-fits-all products offered in the customer journey by third parties; no more ambiguous policies or claims processes. Instead, e-businesses should adopt insurance platforms that leverage technologies like parametric insurance, AI and machine learning, enabling them to create simple protections that are tailored to consumer’s individual needs and generate automatic compensation.

Turning insurance into products millennials love is a great business accelerator. Delivering new types of protections will improve the customer journey in general, and travel experiences in particular. This will restore confidence in insurance, positively affect brand reputation and drive millennials to buy.

About the Author
Elana Marom is a full stack marketer who believes that marketing is about being present, relevant and adding value, alongside understanding how customers want to buy and helping them to do so. As Director of Marketing at Setoo, she’s leveraging her extensive marketing experience in start-up and enterprise environments to raise awareness about the paradigm shift evolving in the insurance industry and drive business growth.