This latest Opinion piece is by Mark Colonnese, Product Director at Aquarium Software. The Brexit problem may yet be resolved, but whatever the outcome politically, everyday travel insurance within the EU is set to change over the next few years. How can insurers prepare for a post-EHIC travel market, plus respond to demand from older consumers who have cash to spend, but may have medical conditions too?
On 7th October, the last Thomas Cook holidaymakers were brought home from around the world by the Civil Aviation Authority (CAA), after the financial collapse of the company. For those that had booked an all in one package holiday, the costs of getting home were covered by ATOL. For others, that had perhaps booked only flights with the company, travel insurance suddenly became the lifeline though which they were able to get their money back.
Travel insurance is an essential part of any holiday or business trip. Despite the peace of mind that adequate cover offers, many UK citizens visiting EU member countries have chosen to rely on their European Health Insurance Card (EHIC) for medical cover in the European Union.
With Brexit on the horizon it is time for insurers to rethink how policies are presented to consumers. As the UK negotiates the terms of its exit from the EU, there is still a great deal of uncertainty around the future of reciprocal medical treatment making it even more important to have travel insurance in place. Insurers have a huge opportunity, along with responsibility, to make it easier and more transparent for consumers to purchase the right policy by using digital technology.
A boost for travel insurance policies
To date, carrying a European Health Insurance Card (EHIC) entitles UK citizens to free or reduced cost treatment in other EU member countries. Importantly, this entitlement is regardless of what treatment is required. In other words, even if a traveller needs daily medical assistance the EHIC card entitles them to this across the European Union.
Earlier this year, the UK government made it clear that, in the event of a no deal Brexit, EHIC cards would no longer be valid. Whatever the outcome, it is certain that the reciprocal medical care in place between the UK and other European Union countries will change its current form and that the agreement will be revised in some way.
Conceivably, this could generate renewed motivation and an upsurge in people wanting to buy travel insurance for their holidays to Europe. Yet in consumers’ minds this is not an easy or straightforward process, and is full of potential concerns about the level of cover provided, exclusions and special requirements. In short, travel insurance can be perceived as a headache.
Insurers can take action
Insurers need to shoulder some of the responsibility to drive change in the industry working to put more efficient processes in place that will deliver improved customer experience. Thankfully digital technology is set to transform the insurance industry over the next few years, reducing manual intervention and increasing data insight. This will enable insurers to reshape how people purchase insurance and navigate the claims process.
One of the key challenges ahead is for insurers to personalise travel insurance to cater for specific needs, including pre-existing medical and chronic conditions, so that suitable policies are easily available to all. For example, an insurer using a digital platform for customers to list pre-existing medical conditions can then automatically recommend relevant policy choices to a customer without the need for lengthy conversations with different call centre agents. This provides customers with reassurance and a speedier, more conclusive response.