Location Data Can Transform Business/Travel Insurance

Franz-Xaver Burner, Chief Growth Officer & Co-Founder at bsurance discusses why location based insurance on the go is ideally placed to gain popularity:

So much has already been written about how the pandemic has changed how we all live and work. The early indications from countries that have started to return to ‘normal’ point towards remote and flexible working being here to stay. We have also seen digital adoption of everything from ecommerce to online banking remaining high across pretty much every demographic. The last piece of the puzzle is whether business and holiday travel will return to pre-Covid levels. All things being well we should get that answer before the end of the year.

So with many of these new consumer behaviours set to become permanent, the natural question is how can businesses enhance their offerings to capitalise on these trends? For the insurance industry one of the avenues that could see a lot of innovation and demand is within location based insurance and insurance on-the-go.

To understand why this may be the case, let’s first look at what insurance on-the-go involves. A simple example is travel insurance.

Travelling to an individual country for work, a holiday or both isn’t too taxing, however, if you’re constantly making trips or going through multiple countries the process can get tedious. It’s not usually something that’s top of mind when you’re making all your other arrangements, although the consequences if something was to go wrong and you weren’t covered could be pretty disastrous. Imagine instead that your phone did all the heavy lifting. Using location based data, your insurance could be automatically updated depending on where you are or what you are doing.

This saves the customer a lot of time and potentially money and provides insurance companies with a way to automatically provide wide ranging cover directly to consumers. If as expected the trend for digital nomads continues to grow – you can imagine just how valuable this service would be in removing pain points for health, travel and goods insurance. People love convenience and are more than happy to share some personal data if they can readily see what they gain.

The benefit also extends to other organisations such as banks as a value add to their proposition. You can easily imagine this type of service integrated into their app to enable customers to quickly opt in as they are managing their financial affairs ahead of travelling. We actually worked with Raiffeisen, one of Austria’s banks, to do exactly this with ski-accident insurance. Short-term insurance could be activated via smartphone instantly just before getting on the ski lift.

This is just one very straight forward example. This type of instant opt-in insurance that flexes automatically to a customer’s needs could have multiple, innovative applications. Combining location data with other data sources opens the doors to making fully personalised and dynamic insurance. For example, it could be applied to automotive insurance such as usage based insurance (UBI) – which can modify based on the risks associated with certain behaviours or to be instantly insured on a car that’s not their own.

We have seen in the past two years just how quickly embedded insurance has taken off. Consumers are getting used to insurance being a product that they can instantly avail themselves of without a lot of research or paper work. The natural progression of the industry is towards insurance that readily adapts to consumers’ new needs and lifestyles.

We also know that companies are under a lot of pressure to differentiate their digital offering and a valuable service such as insurance is a very straightforward option to add into the consumer experience. As more companies and people adopt insurance on-the-go the wider insurance industry will benefit from more insight via the large amount of data that will be generated.

This will enable more innovation and bespoke products to be created. We only need to look at the fintech industry for inspiration. There has been an explosion in startups offering a range of new products and tools – from AI-driven money management and financial aggregators through to new KYC solutions and instant personalised loan services. The insurance industry is on the cusp of a similar period of disruption of which insurance on-the-go is going to be an important part. It is often said that, ‘no one wakes up thinking they want to buy insurance’. Well – when insurance becomes embedded in everyone’s lives, they won’t have to think about it again – it’ll just be there.

About alastair walker 12570 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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