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The Travel Insurer of the Future

The Travel Insurer of the Future

Written By: Jeff Rutledge, CEO – AIG Travel



Rapid developments in technology are changing how travelers envision and create their experiences, with live pricing now offering up-to-the-second information on costs and personal concierge-style services providing one-on-one attention on-site or through websites and mobile apps.


In the past two decades, travel has become significantly more common, accessible and affordable. But throughout this period, with consumers turning to online travel planning in droves, the ways we conceptualize, package and market travel insurance have not kept pace. A lot of that has to do with the shift from past years where travel involved a far away, exotic, once-in-a-lifetime excursion to the current model, where the world seems a lot smaller, and travel to another country is just plane ride away — a long weekend available at the click of a button for a surprisingly affordable price.


This evolution has also resulted in a perception among many travelers — and many companies in the travel industry — that this lower-profile travel is less risky. “I don’t need travel insurance to go to London; it’s just London.” But that’s a misperception that could result in a long list of complications. Even the savviest traveler can fall ill or break a leg while abroad.


So how do we continue to safeguard a traveler’s journey while responding to the growing consumer demand for a seamless travel experience and ensure every aspect of their trip – and its protection – can be personalized?


Personalized travel requires personalized protection

Dynamic customization is one of the defining features of the modern travel industry. By combining digital technology and human ingenuity, providers can measure consumer expectations moment to moment, using expert insights to offer the right products and deliver the right services at the right time.


At AIG Travel, we recognized more could be done to help our partners meet the unique needs of their customers, which is why we pioneered a new approach to product development. Our new model allows agents to choose individual benefits, such as trip cancellation or security evacuation, and create a package specifically tailored for their customers’ unique needs.


This kind of innovation is unprecedented in our industry, and we are excited to be the first company in the U.S. market to be driving this much-needed change to the status quo and delivering best-in-class value and service to our clients.


The old paradigm of filing product packages all but required insurers to be able to predict the future: with so many variables at play, there was often no way of knowing what type of insurance customers would need many months or years down the line. Unlike this traditional “bundled package” approach, though, distribution partners can now build a truly customized travel insurance package specifically tailored for their customer’s unique needs.


Marrying technological innovation and product innovation

While AIG Travel has arguably led the pack when it comes to exploring the innovations possible to travel insurance products, there is more we, and the industry as a whole, can do to better utilize emerging technologies to deliver a more integrated experience for customers.


The next step for travel insurers is to harness the power of emerging technologies like machine learning to guide travelers to exactly the right insurance products and services for their particular trip, budget and preferences.


To accomplish this, the future travel insurer will need to generate, consolidate, analyze and deploy real-world data. This rapid-fire flow of information would enable them to employ a “test-and-learn” strategy to design market-based business solutions.


By evaluating the responses of different demographics to changes in specific characteristics of an offer, an insurer can become an extension of its partners’ platforms, offering increasingly personalized products to an increasingly diverse population of customers.


At the leading edge, insurers would offer different levels of integration capable of controlling insurance-related real estate on partners’ web pages and apps. Integration with the insurer would allow partners to maximize corporate profit and facilitate a faster, more efficient process for releasing products to consumers.


The future of travel insurance

Distribution partners will regard travel insurance not just as something they offer customers, but an important product with value for any kind of journey or experience. This is an important moment for the travel insurance sector, and one in which AIG is proud to be an active leader.


All stakeholders in the industry — from online travel agencies to hoteliers to experience providers and insurers — share the same customers and the same responsibility for those customers’ experiences.


The travel insurance sector can no longer stand in isolation or operate on the margins of the travel industry. Its continued evolution alongside the broader industry is critical—not only for travel insurance, but for the entire industry and the travelers we serve.


Insurers now have the ability to offer the right protection to the right people at the right time, deliver solutions that are fully integrated with customer experiences, and help direct the continuing evolution of the travel industry.


Nascent technologies such as artificial intelligence present an opportunity to make travel insurance more relevant and valuable to consumers at every point along their experience. If the recent history of the travel industry is any indication, the future of travel insurance is bright. But turning opportunity into reality requires the flexibility to adapt to evolving consumer expectations and an aggressive commitment to innovation.