How to evolve travel insurance – during and beyond the pandemic

New products born out of customer dialogue and technology

In March 2020, the pandemic put global travel on hold. It affected not only travel, but also travel insurance and challenged banks' credit card insurance. We spoke with Paul Frick, a regional Travel Leader of AXA Partners Northern Europe, about the challenges and opportunities that the travel industry and their customers face – today and in the future



“At AXA Partners, we work daily to develop and improve travel insurance to give our customers a seamless experience. And when the pandemic started, our knowledge and ability to solve problems was really put to the test. To be sure, 2020 has been supremely challenging for the insurance industry”, says Frick.

The pandemic has heavily impacted the insurance business

In March 2020, planes were grounded and people were afraid to travel. This was a major blow to the airline and travel industries in general and, consequently, to the travel insurance industry.
“AXA Partners immediately adopted an agile stance. We examined the situation and began to explore various solutions. We asked ourselves: how can we help people feel safe again and encourage them to begin booking travel?” continues Frick.
AXA Partners and Frick’s team quickly devised a solution in tandem with partners from the airline and the tour operating industries. It was a concerted effort to use insurance as a way to ease concerns about travel.
“We had to look at this from the customer’s point of view. It’s important to have situational awareness and to understand their state of mind. What lies at the heart of their hesitancy to book a trip? We engaged with a large airline and tour operator to jointly investigate how COVID-19 had altered the topography and co-created products aimed at restoring confidence”, notes Frick.

Innovative products and services

The goal was to devise a new industry-leading product designed specifically to meet customer needs.
“People want to know what happens if border control officials detect a fever. Who will foot the bill for quarantine-related costs? What happens with hotel or other accommodations? These are just some of the issues that people need to navigate when planning a trip nowadays”, remarks Frick.
In less than two weeks, AXA Partners had developed solutions that improved traveller’s peace of mind and helped the airline and tour operator industries.
“We packaged several services, including a brand-new teleconsultation service called ‘Dr. Please’. For people residing in and departing from Germany, a German-speaking doctor is just one click away. In co-operation with Lufthansa, we developed ‘Bring me Home’, which included benefits such as medical repatriation, 24/7 medical assistance and quarantine or lockdown coverage. TUI offers a similar solution, ‘Covid Protect’, in several European markets”, comments Frick.

New credit card value-add

Ordinarily, credit cards offer travel insurance. During the pandemic, however, people have done less travelling and more shopping from home. It marks a tremendous shift in behaviour.
“When behaviour changes, we have to change too. We needed to develop a product that helps banks, card providers and cardholders alike. Increased online shopping has created a stronger need for insurance covering different needs, such as ID security as well as product- and delivery-related cover”, explains Frick.
“For example, we can add to credit cards an extended warranty when people pay with their credit card. We can also offer a best price guarantee. If you find a better deal on a purchase within certain timeframe after your purchase, we pay the difference. Cyber cover gives you protection against identity theft and its data cleaning services helps families for example in situations where children have been bullied on social media platforms. These are just some of the examples of how we add new forms of coverage to credit card to create more value for users and to answer the changing needs”, says Frick.

Travel in a post-COVID-19 world

“The biggest question right now, of course, is when this pandemic will end. In the short term, I think 2021 will see increasingly flexible cancellation rules and more re-booking options in order to help get things back on track. Domestic auto travel, biking, hiking and holiday-home rental should also remain strong in the near term. Technology improvements when we work from home will continue to impact business travel, too. It will help businesses save costs while improving their sustainability stance”, continues Frick.
How the products will look post-COVID-19 will be affected by new regulations. The general trend, however, seems to be increasing customisation; for example, when booking a skiing holiday, you can buy specific skiing-related cover instead of complete travel insurance.
“The most important thing is to react and respond to current market trends and customer needs. Just as we did with ‘Dr. Please’. And we have to further embrace digital tools and take advantage of the new technologies such as AI and blockchain. We also have to take a broader view on cancellation policies”, says Frick. 

Urgent development needs

“Parametric insurance is one of the most interesting developments so far. This is where customers receive instantaneous compensation for certain insurance events. For example, in case of flight delay, misconnection or lost luggage, the payment could be received automatically without having to file a separate claim. We will see more of this in the future because it creates a seamless and effortless experience for the customer”, explains Frick.
“The need for travel insurance will remain, but as the world changes so too does the underlying risk. This means that the content of travel insurance will have to change as well. We need to be agile and adapt quickly”, concludes Frick.