Travel insurers face two major challenges, experts say. The first is to help consumers better understand coverage. The second is to accelerate claim processing time.
The latest survey by the Canadian Association of Financial Institutions in Insurance (CAFII) finds that 89 per cent of Canadians say they have at least a reasonable knowledge of the policy terms of their travel insurance coverage before purchasing their policies. Industry sources told The Insurance and Investment Journal that it is their responsibility to keep their customers well informed about this fairly complex type of insurance.
Robin Ingle, CEO of Ingle International, has 40 years’ experience in the travel insurance industry. “We can’t just turn a blind eye and assume that consumers understand all the products. Insurers must ensure that policies are easy to understand and read. Too many legal terms are used. It’s up to the industry to communicate in a language that consumers can understand.”
Ingle’s solution: give several seminars each year across Canada to consumers and travel insurance sellers. “We want customers to realize that they need to be well informed. If there’s a problem during the claim because something was poorly misunderstood by the customer and the case reaches the media, it tarnishes the reputation of the whole travel insurance industry,” he explains.
Complaints about claims
The CAFII survey mentions that although they are satisfied with their travel insurance, Canadians are dismayed at the length of time it takes to process claims .
TuGo CEO, Patrick Robinson, says slow processing times are due to the complexity of travel insurance claims. “Out of country medical claims are among the most complex claim scenarios to manage. Different medical systems, languages, and time-zones can all play a part. To help speed up the claims process, travellers making claims are encouraged to provide all the relevant information and original receipts to the claim management company as soon as possible.”
Assistant Vice-president, travel insurance at Manulife, Rob Iafrate, says that communication with the customer’s doctor in Canada and evaluation of medical files lengthens the claim processing time.
Despite occasional delays, Ingle says he is satisfied with claim processing in the industry. “The Travel Health Insurance Association of Canada (THIA) reports that the industry pays 96 per cent of claims. This is the type of information we should communicate to the population.”
Travel insurance claims are often very costly due to medical expenses. For example, a hospital bed in the United States may cost US$5,000 to $10,000 per day, Ingle says.
To ease customers through the claims process, many insurers have turned to applications or other tools. “All insurers have their own way of helping customers when they are abroad. We have an emergency service available at all times and we can communicate in 28 languages. If a problem occurs we can guide the insured or talk to the healthcare professionals wherever they happen to be,” Ingle explains.
Robinson of TuGo says the industry is rapidly changing. “Technology is driving consumer preferences across the board, with online platforms and mobile apps connecting customers with the tools they need to get quotes, purchase insurance, and submit.” Their expectations have also risen, he adds.
Technological advances are also having an impact on insurance purchases. The CAFII survey found that 34 per cent of consumers bought travel insurance online, 32 per cent by telephone, 30 per cent in person and 4 per cent another way.
The Conference Board of Canada reached a similar conclusion in its report on travel insurance, which Robinson shared. However, the report finds that people who obtain coverage from a travel agency or association are more likely to do so in person, while the telephone is the most common purchasing method for policies obtained from insurance companies and brokers. Travellers who buy insurance from a financial institution or travel company (namely, an airline) are more likely to buy their policies online.
“Customers are buying trips online more and more often, so they will tend to do the same with insurance,” Iafrate of Manulife, says.
Robinson of TuGo says that customers with more complex medical conditions continue to purchase their insurance in person or by telephone.