When it comes to travel insurance, it’s never been easier to be a customer - you can simply click and buy insurance when purchasing your flight, your bank may have a travel insurance policy you can easily grab for annual cover, or you can use an online aggregator to compare policies.
But despite this, many people are not getting the right travel insurance, because they’re just clicking on a product and buying it without understanding what they’re getting.
That’s according to Nel Mooy, head of travel for AXA, who is an expert in the field of travel insurance and how it’s changed over time.
“Travel insurance is a super complex product and it covers so many things - so it is liability, it is medical, it is cancellation, it is interruption, it is all types of things,” Mooy said.
Because of this, horror stories emerge in the news from people on holiday who thought they had the right cover but then ended up stuck in a foreign country or with huge medical bills, because they didn’t understand the fine print.
Mooy compares the insurance and how customers react to shopping for it to other products, and says that because the price of travel insurance is so cheap it makes people put less time into researching what they are buying.
“It’s a relatively cheap insurance, and in relation to the potential loss that you could have, especially on medical, that’s quite big,” she explained.
“I would say overall that it’s a challenge to have customers engage with the policy wording and with the quality of policy because the prices are not that high. If you buy paracetamol, you don’t spend as much time as if you buy some nice Dior perfume. But the price of travel insurance doesn’t reflect the value it actually could give you.”
It’s because of this low cost, Mooy says, that travel insurance isn’t often sold through brokers.
“Because the policies are relatively cheap, there has, for a long time, been the heritage of selling travel insurance through brands that already have distribution,” she explained.
However, according to the executive, brokers will always be relevant because they know more about customers than anyone else.
“For so long now, people said brokers are going to go,” Mooy said. “Brokers are enterprisers, and brokers ultimately are the ones who are the best at understanding what the customers need.
“They are the ultimate customer influencer, the ultimate customer business, they reinvent themselves to make sure they stay relevant.”
The head of travel said she believed that brokers will always find a way to survive in insurance, even in markets like travel where they are not usually the go-to avenue.
“I have no worries for the broker segment,” she said. “And indeed, for this cover if you look on the aggregators there are some specialist brokers out there that really specialise in aggregator travel insurance, so in a way that is a new opportunity.
“With the rise of the aggregator, brokers always have to stay relevant, and should continue to reinvent.”