Insurance as a driver for growth in travel

6 minutes to read
In a nutshell

No industry is safe. Changes in consumer behaviour in general and consumer expectations, in particular, are heaping pressure on a wide range of business models; travel is no exception.

A suite of Open APIs could play a crucial role in developing the travel industry’s value proposition. Ultimately, becoming an invaluable tool in building more rewarding customer experiences to make a significant contribution to travel companies’ bottom line.

But it’s early days - the journey is just beginning.

A Digitally-driven Revolution

The travel industry has grown dramatically in past decades, reaching nearly 1.2 billion international arrivals in 2015: a striking increase versus the mere 25 million of 1950. The number represents a staggering increase of 4,700%.

This figure is only expected to grow, reaching 1.8 billion international arrivals by 2030. Despite the fact travel is one of the fastest-growing global economic sectors, the industry still struggles to escape its legacy systems reliant on mainframe servers.

Moreover, travel companies are fighting to keep pace with evolving consumer behaviour. In Tokyo and Seoul, for example, 30% of hotel bookings now happen on the day of arrival, primarily via a smartphone in a trend that’s only growing; one which will heavily influence the direction of the industry.

Operators must adapt - and fast - signalling the uphill battle they face.

Traditional travel distribution, a sector once dominated by high street operators, was first upended by the arrival of online travel agencies.The revolution enabled a new model of direct distribution in which airlines and hotels suddenly played a key role through their websites; with low-cost carriers and online travel agencies the clear winners, squeezing margins across the industry.

Today, travel companies face a new challenge. The rise of the sharing economy has led to consumers who are more-than-happy to book a room in a stranger’s house: 9% of UK and US travellers have rented space in a private home an a digital revolution that has impacted nearly every aspect of the world as we know it.

This new model is transforming hospitality in its entirety: from finding a hotel to booking a flight, unlocking your door to personalizing your stay. So, travel brands must get smarter in adapting to rising consumer expectations; and leverage - not avoid - technology. For it’s the companies willing to explore relevant, personalised offers that will outperform those that don’t; while Open APIs will provide the pivotal link in unlocking this ambitious goal, bringing it within reach of every organisation open to change.

Artificial intelligence, customer personalisation and real-time operations require relevant, trusted and timely data to operate at an optimum level. A fact recognised in the IATA’s 2017 report, which labelled APIs as the essential building block to enable communication between software programs and other applications.

Understanding Open APIs

To understand APIs, and what they could mean for the travel industry; let’s first explore an analogy to showcase their use in real terms.

Electricity is something we all use, every single day. Utility companies supply it to end-consumers - be it from a solar panel, a nuclear power station, or a wind turbine; but no matter the source, the end user always has the same access point: The socket.

The utility company is essentially providing a service (electricity) to consumers, which consumers access through a common point (the socket). Sockets vary from one country to the next, so consumers can only use the service provided they have the appropriate authorisation; i.e., the right plug.

Now, to put this in the context of the API.

Consider the API as the socket: It acts as the gateway connecting the service (electricity) to the end user.

Consumers access the service via this one means with the freedom to use the service in any way they want; irrespective of where the energy comes from or how it was generated. Solar, nuclear, wind, whatever; for the user, what happens in the background is irrelevant, the only consideration is freely accessible electricity from an openly accessible source.

New Horizons with Open APIs

Industries use APIs in different ways, integrating tools that allow effortless communication, seamless file sharing, efficient customer service and much, much more.

There are now APIs that provide:

  • Detailed real-time flight information
  • Flight location services
  • International visa application services
  • Car rental services
  • Hotel searches

The possibilities are near-endless.

Yet, we are still in the early stages of our journey. According to an IATA survey, just 26% of airlines and airports offer open access to internal APIs. However, the IATA predicts 71% of travel industry operators will have some form of Open API in place by 2020.

The report quotes Stuart Birrell - CIO at Heathrow Airport- highlighting, “APIs are critical to enable agility and innovation, provide us with a competitive advantage, enable us to extend our reach in a digital, indirect channel and deliver a seamless, personalised passenger experience” - a prescient example of an industry stalwart recognising the scale of the opportunity.

People prefer to make their reservations through ‘all-in-one-place’ platforms. They’ve reshaped user experiences, unifying, and eventually simplifying it for average travellers.

APIs are, albeit gradually, transforming the travel industry. They are increasing the variety of tools that operators can integrate into their online services. Yet, this is still the beginning for the API economy as the majority of opportunities which APIs will uncover remain difficult to imagine.

It is likely that online travel services will focus on user-friendly experiences with exhaustive information provided through websites and apps; with winners emerging dependent on how well each provides travellers with timely, relevant and personalised detail as illustrated by technology consultants Altexsoft:

“People prefer to make their reservations through ‘all-in-one-place’ platforms. They’ve reshaped user experiences, unifying, and eventually simplifying it for average travellers.”

But the truth is, the capabilities run much deeper. So, while Altexsoft provide a very clear overview of what is currently available, their post misses one crucial detail.

Until now, there was no genuine way to integrate an automated digital insurance product into your online service; moreover, where such a service appears automated, it actually relies on a checkbox solution generating an email with pre-populated information where sometimes, the detail is outdated; at other times, it has the wrong contact information or email address.

Finally, the legal process protecting the customer - the Insurance Distribution Directive - is yet to be enforced. And arguably the most frustrating element; the majority of the process involves manual work.

You read that right: Manual. Work.

Data is not fetched by the insurer; an employee must manually transfer all necessary information to the insurer to allow them to encode the detail into their system. The process not only drives up prices; when there’s a claim, there’s a strong chance the insurer has no idea who the claimant is. Hence, it takes an age for even the most straightforward of lost luggage claims.

The situation does not represent a progressive industry.

The Journey is More Important Than the Destination

Qover’s roots lie in the insurance industry; we know a thing or two about legacy systems. We appreciate that for teams which run day-to-day operations, overly-forward-looking initiatives can seem out of reach.

After all: who can afford such luxury while already stretching the capabilities of today’s systems, day-in, day-out? But we must recognise: Every organisation is different, each can move at its own pace, and there’s a compound effect in innovation.

Even small, incremental steps can make all the difference, and it takes just two minutes to integrate an Open API. So, if your organisational ambition is to be as relevant to your customers as possible - to offer them infinite value - there’s no reason not to explore the opportunities in Open APIs.

Qover Removes the Friction

Qover has developed a top-quality digital travel insurance product that fits seamlessly into any sales process. Our Open API is customisable, enabling bespoke digital insurance products tailored to the precise needs of the client.

The days of a pieced-together offering, ill-fitting of actual requirements, are over: Qover’s real-time connection via Open API instantly resolves this pain.

Any organisation - even the less digitally mature - can benefit from our approach. Qover’s white-label storefront is fully-customisable for an on-brand solution. You can offer own-label travel insurance within minutes, generating a valuable new revenue stream without calling on internal resources.

Once integrated, Qover takes charge of both the digital and insurance processes - from claims management to customer service - allowing partners to focus on core operations, client relations, and other value-driven initiatives.

If you want to find out more, our Travel Insurance API Documentation details exactly how you can optimise your service with Qover’s travel insurance product including:

  • Medical expenses
  • Assistance
  • Ski-trips
  • Cancellation
  • Legal expenses
  • Personal Liability (rarely included in standard insurance products)

If you’re ready to take your customer travel experience to the next level, please, get in touch.

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