Sydney, December 16, 2021 — A recent travel insurance survey shows that 50% of Australian travellers were not covered for pandemic-related reasons when purchasing travel insurance, despite purchasing such a policy for pandemic protection. This was the second highest rate of non-coverage globally out of the 20 countries polled. This is according to a survey, conducted by Momentive.ai, and commissioned by Cover Genius that observed 507 Australian travellers to better understand sentiments regarding travel insurance, their preferred channels for obtaining it, and their experience when making a claim. 

This shows that though travellers are seeking peace of mind on their bookings, traditional one-size-fits-all insurance misses the mark on the new types of scenarios they need coverage on. To improve satisfaction and bring a future-ready model for customer-centricity, there’s a clear need for the industry to reconsider what protection means.

The survey showed that 39% of Australian travellers plan to switch from their current travel insurance channel due to dissatisfaction with coverage and claims experiences. In addition, 40% of travellers would prefer to purchase travel insurance directly from their travel provider or agent for their next trip, growing from the 27% who purchased this way in the past 18 months, which on a regional (APAC) scale is the highest adoption rate for embedded travel insurance.

In comparing recent purchases versus future purchase preferences for travel insurance, 68% of people who purchased protection from their travel provider would do so again, whereas 46% of travellers who previously purchased protection from an online insurer said they’d switch to another source of protection next time – a figure that is the highest globally and indicative of the deep dissatisfaction with online insurers since the pandemic began.

Findings show that while 40% of Australian travellers got travel insurance to protect themselves from pandemic-related issues since March 2020, half (50%) of these travellers had pandemic-related claims rejected, the second highest claim rejection rate globally.

“Since the start of COVID-19, our network of travel partners have seen a 647% increase in attach rates, showcasing the accelerated need for protection,” said Angus McDonald, CEO and Co-Founder of Cover Genius. “In today’s environment, the nation’s leading digital and digitally-enabled companies — whether airlines, OTAs, cruise lines or even banks and fintechs — need to lean on insurtechs for tailored protection suitable for their customers, rather than relying on traditional insurers and legacy systems to administer protection to their customers in their time of need.”

When asked to rate their claims experience, customers scored an NPS of -43 for all sources of travel insurance (travel provider or agent, online insurer, health insurer, or credit card). Australian customers with free insurance via their credit card rated their experience with a post-claim NPS of -46 and an average completion time of 17 days. Cover Genius’ post-claims NPS stands at +65, the highest independently monitored score for any insurance company worldwide.

The study also showed a correlation between NPS and resolution time for claims, suggesting that claims backed by faster payments, clearer policy wordings, online status updates, online filing and avoidance of data re-entry can all increase satisfaction rates.

“As customers expect a digital-first experience, now is the time for major brands to step up and protect their customers with embedded, hyper-relevant products that reduce friction and are fit for a future where customers increasingly want their protection to come from their favourite brands,” said McDonald. 

The study follows on from two groundbreaking reports that showed customers — universally because it’s more convenient — have a strong preference for bank-embedded protection based on transaction monitoring, and they want the peace of mind knowing that their favourite retailers can tailor warranties and shipping insurance to their underlying items.

Download the full report, “A consumer-focused survey on claims experience and embedded offers for the travel industry – Australia“.