Companjon, a leading European tech business specializing in developing and underwriting embedded insurance, announced the key findings from its fourth extensive consumer report on insurance and the travel industry. The report uncovers evolving consumer behaviours and demands toward embedded insurance when booking travel experiences.

Embedded Insurance: Driving The Travel Industry’s Top And Bottom Lines, is the latest report and part of an ongoing annual series. Companjon commissioned global data and insights firm Dynata, to survey more than 5,000 participants across major European markets — France, the U.K., Germany, Italy and Spain – in Q3, 2022.

What is “embedded” travel insurance after all?

When insurance is added at the check out while purchasing tickets or vacations, without any additional paperwork, but just as an “opt-in” to provide coverage, it is called Embedded Travel Insurance. It is weaved into the entire framework and seems like a simple add-on feature, just like extra cheese on pizza, but actually, it is a completely different product.

Thus, to put it simply, “embedded” travel insurance is the “bundling” of insurance at the time of check-out of car rentals or flight tickets or hotel bookings at the point of sale as an add-on facility; whereas it is actually a different product altogether.

Importance of “embedded” travel insurance

With artificial intelligence sweeping its way in the digital era, millennials and Gen Z people do not purchase a product or a service in a silo. It comes with ease and convenience. So, while purchasing online, the element of risk is paramount in the mind; and if that can be overcome by simply paying an additional fee, it shouldn’t pinch too much. For customers, it is an additional benefit provided at minimal cost for the convenience of coverage of risk!

Travel-related embedded insurance products prove to be an ancillary revenue opportunity for online travel companies as consumers overall showed a strong appetite for cover that provides flexibility and are event-triggered. These top-performing products include Cancel For Any Reason (90%), Luggage Loss Insurance (85%) and Delay Insurance (84%).

Similar to last year’s report, it shows that the majority of consumers, particularly 25-44-year-olds would consider purchasing embedded insurance mostly due to automated claims processing, instantly fixed payouts and reliability of service. This comes as no surprise with millennials being recognized for their hyperconnectivity and digital expectations when it comes to purchasing goods and services.

The reliability of embedded insurance, that it’s easy to understand what is covered, and a seamless claims experience were the most compelling characteristics for consumers to favour embedded insurance over traditional insurance.

Other insights relevant to the travel and activities industries:

• Embedded insurance influences switching behaviors in travel and mobility users as 64% are likely to switch providers if they were offered to Cancel For Any Reason, 58% if offered Luggage Loss Insurance and 56% if offered Delay Insurance.
• Over 40% of consumers would choose embedded insurance if It gave them the flexibility to cancel the purchase and be reimbursed instantly.
• Consumers favour embedded insurance as an upgrade to their ticket or bundled within it.

“Customers see the relevance in digitized insurance products and are demanding to be offered them during the purchasing journey on their favourite booking platforms“, said Companjon‘s CEO, Matthias Naumann.

“As seen by our own partners, insurance products that are embedded and digitized across the entire user journey allow them to gain new revenue. In a digital-first world, global platforms should rethink the role embedded insurance can play for better customer experiences, increased loyalty and greater revenue.”

Rising tourism demands to drive the global market growth

The ease with which travelers can book flights online using smartphones and websites that offer a large selection of holiday packages is causing tourism growth, driving the global travel insurance market’s expansion. Flight delays, missing luggage, and medical problems are just a few of the occurrences that the increase in tourism could bring about. One of the main factors driving the market’s growth is how customers purchase travel insurance to lower these risks.

Additionally, solution providers should considerably profit from integrating cutting-edge technologies like Artificial Intelligence (A.I.), data analytics, and machine learning with G.P.S. during the forecasted period to enhance the current travel insurance platform. Many travel insurance providers are working to grow their relationships with insurers to improve their services and meet client expectations. These improvements are intended to improve the consumer experience. This fuels market expansion.

VisitorsCoverage is a Silicon Valley-based insurtech company headquartered in Santa Clara, Calif. which provides travel insurance for millions of global travelers in over 175 countries. They are the largest provider of visitor’s insurance for inbound travel to the U.S. and offer numerous specialized coverage products for travelers in a world of growing natural disasters, civil incidents and travel calamities.

Using patented online search, compare and purchase technology, VisitorsCoverage partners with the world’s top insurance underwriters and providers offering hundreds of tailored policies to their customers. Founded in 2006 by insurtech pioneer and industry expert Rajeev Shrivastava, they have helped corporations, families, solo travelers and service groups find affordable coverage in minutes that allows them to travel the globe confidently and worry-free.

VisitorsCoverage is constantly evolving by creating innovative, market- demand products and by continually updating an extensive online knowledgebase for their global clientele.