Powering Travel Insurance partnerships with customizable enterprise technology solutions

Welcome to another edition of Travel Insurance Radar! This time, we're looking into parametric insurance and how it's disrupting the industry. We'll talk about AI improvements and market trends that are shaping the future of the insurance industry.

Global Travel Insurance Market News

??Parametric Insurance Market Set to Reach $29.3 Billion by 2031

• Allied Market Research projects that the global parametric insurance market will grow to $29.3 billion by 2031, fueled by advancements in big data and the establishment of reliable indexes.
• While costing more than traditional insurance, parametric insurance offers streamlined claims processes, quick payouts, and no disputes over coverage.
• Insurers are adding parametric insurance to balance risk exposure and manage financials more effectively due to fixed underwriting costs and lower claims expenses.
• Parametric insurance is not limited to weather-related risks and has the potential to expand into areas such as management liability and cyberterrorism, offering insurers and insureds new options for coverage.

??AI's Impact on Parametric Insurance

• The parametric insurance market is expected to reach $35.6 billion by 2032, reflecting a rising demand for innovative insurance solutions.
• AI enhances parametric insurance by improving risk assessment, automating triggers and payouts, streamlining claims processing, and enhancing the customer experience.
• Insurers face challenges such as inefficient risk assessment, limited customization, manual data processing, and higher operational costs without adopting AI.
• AI is utilized in various parametric insurance applications, including weather-based insurance, crop insurance, natural catastrophe insurance, pandemic risk insurance, travel insurance, supply chain insurance, and parametric cyber insurance, demonstrating its versatility and effectiveness in insurance practices.

??Parametric Insurance Complements Traditional Insurance Coverage

• Rather than replacing traditional insurance, parametric insurance complements it by covering risks that are difficult to insure, such as natural disasters, extreme weather events, and supply chain disruptions.
• Parametric insurance can be embedded alongside traditional insurance models or offered as a standalone product, providing clarity, speed, and coverage for traditionally hard-to-quantify losses.
• Real-time access to independent data and the use of technologies like blockchain help prevent fraud by automatically triggering payouts when predefined conditions are met, eliminating opportunities for manipulation.
• As climate change and associated risks become more pronounced, parametric insurance is expected to see sustained growth, offering innovative solutions for risks like floods, earthquakes, and crop loss.

Source: Pavlov, T., & McEwen, J. (2024). Parametric insurance: The future of insurtech? Torys Quarterly.

??How is Parametric Insurance Disrupting the Industry

• Using objective data like weather or seismic activity, parametric insurance eliminates the need for claims adjusters, saving time and costs.
• Parametric insurance can be tailored to specific needs, offering coverage for risks that are difficult to insure with traditional products.
• Advances in IoT and AI are enhancing parametric insurance by providing real-time data and improving risk assessment and pricing accuracy.
• Blockchain technology can automate payouts, enhance transparency, and improve the efficiency and security of parametric insurance, reducing administrative costs and preventing fraud.

Source: Finance Magnates. (2023, April 21). Parametric insurance and why it's disrupting the industry.

??Travel Insurance Partnership Movements

??Pattern Insurance - WeTravel

• Pattern Insurance - WeTravelPattern Insurance, an insurtech provider, has partnered with WeTravel, an integrated travel booking and payment platform, to integrate insurance into the travel booking process.

??IMG - Teladoc Health

• IMG - Teladoc HealthInternational Medical Group (IMG), a globally recognized company offering insurance benefits and assistance services, has expanded its partnership with Teladoc Health to offer telehealth services to a broader range of travelers.

??Personalized Claims Handling: Revolutionizing Customer Experience with AI

Learn how AI is transforming the insurance claims handling process:

• Insurers are leveraging AI to offer more self-service options online, meeting the increasing demand for personalized experiences in the digital era.
• AI streamlines the claims handling process, reducing paperwork, verification procedures, and human intervention, leading to faster processing and improved customer satisfaction.
• Insurers are utilizing AI to analyze customer data effectively, providing tailored services that meet individual needs and preferences, enhancing customer retention and loyalty.
• Case studies from companies like AIG Travel Guard and Faye Travel Insurance showcase how AI is transforming claims handling, offering faster and more user-friendly processes that enhance customer satisfaction and loyalty.

Read More

??Introducing Lea: An AI-powered Digital Native Travel Insurance Claims Solution

We are thrilled to announce the launch of Lea, an AI-powered Digital Native Travel Insurance Claims Solution designed to simplify and enhance travel insurance claims processing.

Lea is designed around seven key modules:

1.Online Claim Submission: Our user-friendly online portal guides claimants through the process, ensuring all required information is captured upfront. This reduces back-and-forth communication, saving time for both the claimant and the claim handlers.

2.Centralized Collaborations Claims Hub: All claim details, documents, and communication are organized in a single, editable workspace. This fosters seamless collaboration and allows anyone on the team to quickly understand the claim status.

3.Automated Claim Assessment powered by AI: Lea integrates rule-based management, document verification, and fraud validation to swiftly make automated, real-time decisions on claims. This functionality frees up valuable time for your claims examiners to concentrate on complex cases, offering personalized attention to customers.

4.Customer Self-serve Policy Management: Provide your customers control with a self-service portal where they can access policy details, update information, and manage their coverage independently.

5.Omni-channel Customer Service:Deliver exceptional customer care through diverse channels, ensuring constant connectivity and support for your customers.

6.Outbound Customer Engagement: Proactively reach out to your customers, keeping them informed and engaged throughout the claims process.

7.Advanced Claim Analytics: Extract valuable insights from data to identify trends, optimize operations, and make informed decisions. These insights enable your claims team to pinpoint improvement areas, allocate resources effectively, and enhance the efficiency and effectiveness of the claims process.

This reading is a part of the AI in AI in Insurance 2024: Powering Travel Insurance partnerships with customizable enterprise technology solutions. You’ll get an email weekly on the case studies of how industry players are using AI to transform their insurance value chain in various verticals.

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2024 Top 50 Airlines Travel Insurance Benchmark

2023 Top 30 OTAs Travel Insurance Benchmark

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2023 France Travel Insurance Outlook

2023 USA Travel Insurance Outlook

2023 Canada Travel Insurance Outlook

2023 Singapore Travel Insurance Outlook

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