Travel insurance providers are increasingly offering consumers more options in the form of customized policies, such as insurance for cruisers or expanded coverages on standard policies.
Stan Sandberg, co-founder of policy-comparison site TravelInsurance.com, said. "It comes down to people want to pay for the things they want, and to some degree, when you have an inflexible product, you can't strip out the pieces you don't want. You're paying for stuff you might not need or might not want."
Sandberg pointed to several new features from insurers. For example, April Travel Protection and Berkshire Hathaway Travel Protection recently launched cruise-specific products. April also introduced an annual insurance plan with trip interruption and cancellation coverage, which it said is an industry first, and a plan dedicated to trip cancellation only.
"I think it is a trend that you'll continue to see, because traditionally, travel insurance products have not been very flexible," Sandberg said. "You weren't able to take a more a la carte approach to your coverage."
Jason Schreier, CEO of April, said more customized insurance products have been made possible in large part by aggregator companies like TravelInsurance.com, Squaremouth and InsureMyTrip.
"Even some of the bigger, established travel insurance companies we compete against who have been in business for over 20 years, none of their sites, none of their booking engines were nearly as sophisticated or as easy to use as these aggregator websites," Schreier said. "These aggregator companies are really technology companies."
April's base product is called its Choice Plan, which can be customized with a number of optional coverages and limits.
"I think it's a great thing because it allows people to be able to create their own peace of mind in areas they feel are pertinent to their own situation without having to just bounce between 20 different products," Schreier said.
Like Sandberg, Schreier said he's seen a number of insurers that are introducing more customized products.
Beth Godlin, president of Aon Affinity Travel Practice, said the new products speak to one of the industry's consistent trends: Insurers are looking for "ways to evolve the product so it continues to cover more and more and more."
She added: "It's a balance. You can't just add covered reasons without often adding cost, and there is a limit to what customers are willing to pay for a short-term insurance product.
"So the constant balance of covering more but providing the right amount of coverage at the right value, based upon what the customer wants to pay, is a continuous evolution."
Customized packages enable consumers to find a more tailored product, increasing their propensity to purchase a policy.
Allianz has embraced a slightly different tactic, according to Daniel Durazo, director of marketing and communications. With its e-commerce partners, Allianz uses machine learning and artificial intelligence (AI) to present a tailored mix of coverages based on past purchases and other details.
"Our experience shows that personalization increases both customer satisfaction among consumers and ancillary revenue opportunities for travel suppliers," Durazo said.
Within the travel agency channel, Allianz offers three plans and two optional additional coverages. Durazo said travel advisors prefer simplicity over option-laden policies.
In the future, though, it is likely Allianz will integrate AI into its AgentMax booking platform, he said, enabling the technology to recommend the best insurance products for agents' trips, as it does today for Allianz's e-commerce partners.
"While e-commerce companies are best poised to take advantage of increased personalization through the use of AI, we think travel advisors may also benefit from this in the future," Durazo said.