Closing borders, air travel restrictions, lockdowns… Despite the efforts of governments and businesses to keep national economies afloat, Online Travel Agencies (OTAs) are suffering. Firstly, they are asked to provide a clear position on their refund, cancellation and delay conditions, with a situation that is changing from day to day. For each journey, they are asked to be the interface with the various parties involved, which are themselves unable to provide clear answers.
This is a responsibility that should, however, be shared by insurance companies, whose core business is, above all, to provide assistance in difficult times. If there is a lesson to be learned from this crisis by OTAs and insurers, it is that their relationship should be more than just a commercial one. They need to become close, fully coordinated partners, which are able to provide tourists with a clear vision of their respective roles in the travel experience.
Often seen as costly or useless, travel insurance offered by online agencies is often relegated to a box to be ticked at the end of the purchasing process, just before entering credit card details. This unfavourable position, combined with a potential lack of clarity about coverage conditions, do not help increase its popularity with passengers. LastMinute.com, for example, recently paid the price for this. The online booking agency was called out by the French consumer rights defence website UFC-Que-Choisir for “unlawful, aggressive and misleading business practices,” after offering travel insurance that looked confusingly similar to a simple purchase confirmation at the end of its process.
As for prices, in 2019, 46% of people in France stated that they were not planning to take out travel insurance for their summer holidays due to the price being too high. In addition to this, there is often a lack of legibility regarding the situations and problems covered by insurance products, which are explained in small font at the end of the contract or hidden behind professional jargon.
And yet, travel insurance is essential. When chosen in a well-informed way, it provides OTAs with the certainty that their customers will be assisted throughout their journey, from booking to dealing with any stress-inducing situations.
Guaranteeing total customer satisfaction depends on improving the visibility and legibility of insurance products. Online agencies should not underestimate or neglect their role in this process.
Agencies can be clear and informative when it comes to helping passengers choose the best possible experience, so they should use this ability to promote their insurance partners and help them get the credit they deserve for the crucial service they provide. They have a shared interest in doing so, which goes beyond just commercial considerations. Why not feature insurance earlier on in the purchasing process, for example, or dedicate a specific section to explaining the various products available on their booking platform? For example, in an "Assistance" section that is visible at a glance on its website, Expedia clearly details the coverage included in the two insurance products it provides in partnership with AIG/Travel Guard.
It is now essential to help people understand that insurance is not an insignificant option that simply adds 70 euros or so to the cost of going on holiday. The role of insurers is, first and foremost, to assist people when they encounter everyday problems, including when travelling.
By becoming true partners, OTAs and insurance companies can provide total assistance for passengers, and a well-managed, reassuring customer experience, which now goes hand in hand with the business continuity they can ill afford to lose.
Constant adaptation is part and parcel of the insurance business, dictating its activities on a daily basis. The constant emergence of new risks, of which the current epidemic is just another example, means insurance companies need to frequently create new products in order to continue to cover their customers in various unexpected circumstances.
As a privileged point of contact for passengers, OTAs have an opportunity to gather a significant amount of data on customers' concerns regarding their trips or problem situations encountered during their stay. If they are well analysed, they provide indicators that insurers can use to adapt or optimise their products. The recent example of Resaneo and its partners Présence Assistance demonstrates the importance of this complementarity when it is well used. Even before European borders were closed, the train and flight booking specialist Resaneo and Présence Assistance launched a cancellation and return guarantee in the event of being placed in quarantine.
Today's troubled and uncertain environment is already acting as a "stress test" for many companies in the travel sector, including both OTAs and insurers, and only those that demonstrate agility and an ability to work in coordination will come out stronger.
Alix Howard, Change Management Consultant