Meitav Harpaz is the CEO and co-founder of Palo Alto headquartered insurtech startup Pattern, reinventing personalized insurance for the travel industry. Before founding Pattern, Meitav was the founder and CEO of multiple startups in the financial sector, including Eccella Corporation (sold to NGDATA), which provided data engineering solutions and data strategy planning to large corporations in Financial Services. In this article, Meitav takes a look at the growing sector of off-grid travel and how insurance brands can create flexible cover that works.
Free to travel the globe once again, 2023’s traveller is keen to cast off the shackles of the pandemic and explore the world. This new found freedom has brought with it the opportunity to return to much-loved destinations with family and friends. There is an overwhelming desire for outdoor, active holidays, and for many, off-grid completely.
In fact, in 2023, 33% of people want to travel to a destination where they can switch off entirely and experience life with only the bare necessities, according to Booking.com. Many travellers are favouring the opportunity for an extreme adventure this year. 58% of people surveyed said they want to go ‘out of their comfort zone’ and be ‘pushed to their limits’.
While this appetite for adventure and remote destinations sounds ideal for those seeking new experiences and a break from the chaos of modern life, for travel insurers, these high-risk breaks can prove complex. However, the tide is changing in terms of insurers creating innovative products to meet travellers evolving needs and individuals themselves understanding the need for protection.
A new mindset
Thanks mainly to the pandemic, holidaymakers have undergone a shift in mindset when it comes to purchasing travel insurance. For many people, before the events of the last five years, travel insurance wasn’t seen as a necessity. Insurance is no longer an afterthought, quickly purchased without any real consideration or regard for checking the details.
The travel industry is experiencing a renaissance in demand for insurance, with Forbes highlighting a significant increase in demand since the pandemic. More people are now buying travel insurance than at any other time in history, and the mindset has shifted with the demand for comprehensive coverage increasing. The desire for more off-the-grid, adventure-based holidays has also driven demand forward, with travelers keen to protect themselves against the associated risks.
Upfront and personal
Embedded insurance is leading the way to satisfy this increased demand for adventure and off-grid travel protection. The technology has become smarter, analysing the information along the buyer journey to suggest relevant cover. Ideal for the sophisticated traveller of 2023 with individual needs to be accommodated and protected.
For example, those seeking remote, off-the-grid trips where traditional medical facilities may not be available or thrill seekers needing to know they are covered in the event of an emergency.
Expecting the unexpected
Parametric insurance is another evolution from the travel insurance industry particularly suited to outdoor, adventure and off-grid travellers. This form of insurance is where coverage is based on specific parameters, such as weather events, flight cancellations or delays, or even natural disasters. Making it ideal for extreme sports and outdoor travellers, where severe weather or a natural disaster could make-or-break a trip.
Parametric’s appeal is far-reaching due to its inclusion of real-time pricing and immediate compensation. Fully automated parametric insurance means no customer has to initiate a compensation claim; the policy is automatically triggered when the event occurs. Customers avoid having to complete a complex claims process. A part of the traditional insurance customer journey discourages would-be purchasers.
One company already using parametric insurance technology to offer its customers peace of mind when booking a trip is US outdoor travel specialist BookOutdoors. Providing customers with access to thousands of designated tent campgrounds, RV parks, glamping resorts and other outdoor holidays across all 50 US states, BookOutdoors integrates rain protection insurance into its booking platform. Knowing they can cancel their booking and receive a full refund if an eligible weather event is forecast gives travellers the confidence to book their outdoor trip.
The road ahead
As travellers seek more adventurous, off-grid trips and destinations, the travel insurance industry must continuously evolve to meet the market’s needs. Ensuring that the protections on offer remain relevant and easy to access, making the purchase a natural, hassle-free part of the travel buying journey.
Fortunately, the advancement of embedded and parametric insurances allows travel companies to integrate highly personalised protections into their existing customer buying journey and provide ultimate peace of mind for off-the-grid adventure travelers.
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