The travel insurance industry has been seeing an upswing in business in recent years, largely attributed to the awareness of new products and various perilous world events.
With a multitude of companies offering a slew of products, insurers are increasingly looking to differentiate themselves from their competitors, principally through customer service, products and their all-important relationships with their key sales channel, travel agents.
"In general, there is increased awareness and purchase of travel insurance by American travelers," said Megan Freedman, executive director of the U.S. Travel Insurance Association. "I think there is a growing awareness of potential travel disrupters, which has led to increases in the number of people buying travel protection products."
According to Freedman, the more companies that are in the marketplace, the more those companies will compete with each other for business. That leaves agents -- and, in direct-booking circumstances, consumers -- with a heap of plans to choose from.
When it comes to insurance products, most companies offer policies that are more or less similar.
"When you talk product, most people are going to say there's actually not much difference [between companies]," said Isaac Cymrot, vice president of industry relations at Travel Insured International.
Rachael Taft, content manager of insurance-comparison site Squaremouth, agreed.
"There isn't necessarily a huge difference between different companies and different products," she said. "A lot of them offer comprehensive packages with the same kinds of benefits."
However, there are some differences. For example, Cymrot said Travel Insured International offers an interrupt-for-any-reason policy in one of its packages. It extends a more common product, cancel-for-any-reason (CFAR) insurance, which usually expires anywhere from 48 hours prior to just before departure, throughout the entire trip.
Cory Sobczyk, director of sales at Travelex, pointed to an existing policy that some insurers have typically offered but recently became much more relevant: the ability to cancel a trip if a traveler becomes pregnant. Considering the prevalence of the Zika virus in many popular destinations and its potentially devastating effects on pregnant women, that particular policy has recently come into the spotlight. Sobczyk said Travelex is one of the few insurers to offer it.
Beth Godlin, president of Aon Affinity's Travel Practice, said that many insurers are working to broaden the scope of what their products cover, but enacting changes within the policies is difficult.
"The process to get products changed in the U.S. is very long," she said. "It can take at least a year and more like two years to get a product filed and approved in 50 states."
Insurance products have evolved, offering, for example, terrorism coverage for the past 10 years or so, Godlin said. But that evolution has been slow.
Berkshire Hathaway Travel Protection offers a unique product in the marketplace: AirCare, which starts at $34 per person on domestic trips and offers fixed benefits to travelers but only in the instance of canceled or delayed flights, missed connections, lost or delayed baggage and tarmac delays.
"It's really dead simple to understand, so people understand exactly what they're going to get," said company president Dean Sivley. He said it also enables Berkshire Hathaway to auto-adjudicate claims in some instances, such as trip delays, and travelers can often receive payment while still on their trip.
Sivley said the product appeals to travelers who might not want to spend much money on insurance and don't need greater levels of coverage, such as medical and evacuation, but want to cover the portion of their trip that can be the most disruptive. He also said the product was introduced in the hopes of showing travelers the levels of services insurance can offer, enticing them to buy a more comprehensive (and expensive) policy for their next trip.
Godlin said AirCare is "a nice blend of a product benefit and a service enhancement that's new and different" and is also geared toward winning a customer's loyalty.
Insurers are also differentiating their companies based on the amount of products they offer. Some, such as TravelSafe Insurance, offer only a handful of products.
According to TravelSafe vice president Carlos Cividanes, the company only offers Basic, Classic and Classic Plus plans, and the only difference between Classic and Classic Plus is the inclusion of CFAR with the Plus plan.
The simplicity is intended to relieve confusion among the consumers who buy and the agents who sell the plans, he said.
On the other end of the policy variety spectrum is Allianz Global Assistance, which offers nearly 300 products. "We have a lot of flexibility depending on how they're buying it and depending on what they're using it for and what type of trip," said Sally Witzky, director of marketing strategy and development.
The variety is meant to "deliver what is best" for travelers, Witzky said.
Different levels of hand-holding
Customer service, ranging from technology offerings popular with consumers to claim servicing, is another way insurers are differentiating themselves in today's flooded market.
Considering the speed to market for new insurance products, Godlin said, insurers are evolving how they provide service. Rolling out online and mobile claims capabilities is one way of doing that.
"Everybody wants to be able to tell the customer as soon as possible, 'Yes, you're covered,' 'No, you're not,' or 'We don't know, but here's a couple of things we need from you in order to get to that,' and to make that process as simple as possible," she said.
Sivley said Berkshire Hathaway has worked to make the claim process easier and quicker. He said his company's average is nine days to pay claims, while others hover around 30 to 45 days. To accomplish that, Berkshire Hathaway has employed technology to enable faster, more efficient processing.
Similarly, Sobczyk said Travelex has placed an emphasis on quickly and efficiently processing claims.
"Our goal for every policy that comes across our desk is, we want to get that cleared, off of our desk, within five business days," he said.
April Travel Protection has also focused on its claims process, offering its Stress Less benefits, CEO Jason Schreier said. Customers can utilize a variety of ways to get in touch with April -- phone, text, email or Skype -- if they need to file a claim. April will assess clients' claims and proactively help them rebook, paying many benefits in real time so the customer does not have to go through laying out initial funds and a subsequent claims process.
"If it's a clear, cut-and-dry, black-and-white, 'you're-covered' situation, why even make the client go through a claims process?" Schreier said.
Allianz is investing in technology through its TravelSmart app, which has become popular with both agents and customers. It enables customers to reach Allianz with questions as well as access safety information such as emergency phone numbers and the nearest hospitals.
"It's also a good way for travel agents, in particular, to give [information] to their customers so that travel agents don't have to field as many questions about the policy itself," Witzky said.
Good customer service and fast claims processing are becoming ever more important in a world where reviews, both positive and negative, are easily found online at sites such as Squaremouth, Taft said.
"We've really seen that companies are starting to focus more on improving their claims process and differentiating themselves that way, using technology to pay claims faster and to go through the process more quickly," she said. And they're really using that as the way to promote themselves to customers as a little bit different from the competition.
To expedite the claims process, Tin Leg -- Squaremouth's insurance product -- has employees interview clients, filling out their claim for them, rather than have the customer just submit the form. The Tin Leg info is sent to the client for review and possible changes, "but then they're not confused trying to figure out how to fill out a form," Taft said. "We're doing it for them and letting them just tell the story."
The crucial agent channel
Even with a growing number of direct-to-consumer options, insurance companies continue to cater to travel agents.
"The overwhelming majority of business comes through the trade, whether online or offline or [via] wholesalers, so I think the trade is quite important to travel insurers," Godlin said.
With that in mind, insurers have created loyalty programs and pledges to agents, and they've created marketing and educational materials for agents to have at the ready.
Rhonda Sloan, global head of travel communications at AIG, said her company's goal is to give agents the tools they need to succeed. For example, whenever there was a terrorism incident, the company previously sent agents information on coverage. Now AIG has started sending its detailed security reports created by its global travel-security team, "just giving [agents] more information so they're better informed, quite frankly, about what's happening in the world," she said.
Allianz has created a 50-page digital guide for agents, detailing what they need to know about insurance, tips for selling the product and how best to help their customers, Witzky said.
Travelex also works closely with agents through a large team of sales representatives.
"We have always been a service-oriented company," said Christine Buggy, Travelex's vice president of marketing. "We know that the travel agents, their primary area of expertise is travel, and insurance can be very intimidating not only to the travel agent but also to the client.
"We always have said, 'You're the travel expert; let us be the insurance expert.'"
Sobczyk said Travelex has created an agent loyalty program, enabling agents to earn points per policy sold, which they can exchange for a variety of items, gift cards and similar rewards.
To underscore agents' importance, Travel Insured International has a loyalty policy in place.
Cymrot said that once an agent books a client with the company, if that client returns later to buy direct, the agent will still receive a full commission.
Benefits evolve with world events
In recent years, the headlines have been dominated by stories of terrorism, disease and other negative world events. Insurance, though, mostly remained static.
"Overall, travel insurance hasn't changed that much over recent years," Taft said."Terrorism coverage came about after 9/11, but for the most part, the covered reasons under trip cancellation and trip interruption have remained consistent."
However, certain benefits have come in and out of vogue with world events, she said. Taft cited the 2008-09 recession, when travelers were more interested in employment layoff benefits, enabling someone to cancel a trip if they lost their job. Today, terrorism is more of a priority.
The Zika virus might also have accounted for the spike that some insurers have seen in CFAR sales.
The very regulated nature of insurance has been somewhat prohibitive to changes based on world events, Godlin said.
"While companies have and will and are evolving their products to provide more relevant coverage to people -- like terrorism wasn't covered in many products until 10 years ago, and then a lot of companies added it -- it's a long process," she said.
Berkshire Hathaway Travel Protection's AirCare product starts at $34 per person on domestic trips. An incorrect price was included in an earlier version of this article.