mobility|5 mins Read
Expert View : Challenges for the Travel insurance industry going forward
December 20, 2021
As the Covid-19 pandemic is creating a new daily life and that we see the resurgence of a new wave, it's hard to expect to go "back to normal" in a near future. Research conducted by the United Nations' World Tourism Organization (UNWTO) shows most experts do not see a return to pre-pandemic 2019 levels happening before 2023. In the meantime, how can we tackle the new normal, by designing safer travel for people and reinforcing confidence? Here are a few trends that will guide the future of travel, only safer.
During the year 2020, the number of international tourist arrivals decreased by no less than 60 to 80% around the globe. Now, governments still have to deal with the sanitary crisis, despite vaccination and testing campaigns, people can't hope to travel again with peace of mind in the near future. According to Inmarsat's Passenger Confidence Tracker, 60% of passengers declare they would be happy to fly again by the end of this year but this may not mean that international travel is on to a full start again.
Fear of the virus, restrictive domestic travel measures and overall uncertainty (cancelled or postponed flights) have all participated in the surge of customer's mistrust that still impact the travel industry. According to Inmarsat study, travel factors such as pre-flight COVID testing (56%), digital health passports (47%), thermal scanning (42%), destination status alerts (39%), staggered boarding (39%) and staggered security queues (36%), all improve passenger confidence and help reduce fears of spreading or catching the virus.
These measures benefit from the development of technology and point out the need for airlines and other tourism actors to embrace digitalization to remain relevant and retain their customers leveraging digital for easier and safer travel experience.
With this situation and these new expectations, managing the unexpected has become the norm. Travelers increasingly want to be able to cancel or reschedule a travel reservation at no or minor additional cost (27% of respondents, according to a study conducted by Inmarsat). This is reflected in their concerns, as they now feel particularly concerned about a travel provider's ability to handle their loss of item (19%), home incident (17%), physical harm (14%) and logistical issues (13%).
The health context also modifies travel desires and the will of travelers to organize distant trips. Indeed, 50% say they are more likely to choose a destination on their own country or in a rural area. We also note an increase in road-trips and other ways of experiencing travel differently: workation (teleworking in a place other than one's home) and staycation (holiday spent in one's country rather than abroad). Another indicator is that the car or recreational vehicle (mobile homes) is widely preferred by travelers, who see it as a safer transportation mode than the train or plane, especially in COVID situations.
Travelers are more open to new forms of tourism, more respectful of the environment, such as slow tourism, which consists of taking time to travel while enjoying nature, or eco-tourism, which proposes to travel while preserving biodiversity and cultural resources. We can also observe the rise of travel brands identified as "sustainable", which propose specific trips, such as Seacology or Natural Habitat Adventures.
COVID has also profoundly changed the relationship of travelers to technology. 80% now say it increases their confidence in travel and should contribute to more transparency. Regarding health conditions, 9 out of 10 travelers would be in line with a digital health passport, if it helps them to travel. They see a positive benefit to this tracking, such as receiving real-time notifications when they are at risks of natural disasters, terrorism or malicious acts near where they are. Finally, COVID-19 has accelerated adoption of digital in the medical sector. 80% of patients who have tried teleconsultation are willing to do it again, even after the pandemic.
When traveling, travelers want unique, intimate and tailor-made experiences, that's where the value of a trip lies for them. Customized services according to their tastes and desires, a feeling that they are the only ones or have been the only ones to live this moment: exclusivity. This can be found even in the booking process, where the traveler wants more clarity and transparency in the conditions of cancellation, reimbursement and insurance options.
How can we meet all these expectations? By being flexible and offering personalized, modular offers and optional insurance coverage possibilities. Travelers want insurance products adapted to their needs and sometimes find it difficult to compare insurance policies when it comes to specific requirements. Their protection must be flexible, simple, clear and transparent. COVID remains a major concern, and not yet under control, so travelers need dedicated covers, integrating both health and travel.
This major paradigm shift is an opportunity to make insurance easier for users and to increase its appeal by being closer to travelers, with greater emotional benefits.