This article first appeared in Digital Edge, The Edge Malaysia Weekly on November 14, 2022 - November 20, 2022

Customers have been dissatisfied with their traditional general insurance coverage and claims experience ever since the Covid-19 pandemic struck, given the limited purchasing options. 

Research done by US-headquartered insurtech firm Cover Genius in 2021 shows that 38% of travellers across Southeast Asia intend to switch how they purchase travel protection, mostly in favour of suppliers and online travel agencies (OTAs) that can embed it within the booking experience.

On top of coverage that fits their itinerary, customers also want a fast and frictionless claims experience. Cover Genius’ senior vice-president for partnerships, Asia-Pacific, Barney Pierce says when customers were asked to rate their claims experience, those in Southeast Asia gave a net promoter score (NPS) of zero for all sources of travel insurance — which consist of a travel provider or agent, online insurer, health insurer or credit card — displaying the overall dissatisfaction with travel insurance in the region.

Pierce adds that 47% of travellers across Southeast Asia would prefer to purchase travel insurance directly from their travel provider or agent for their next trip. This can only be achieved with embedded protection, he says.

In line with the demand for more flexibility, Cover Genius partnered with online bus booking site, redBus, to bring protection to travellers if they need to make a change, with no questions asked. RedBus can now offer customers in Malaysia and Singapore cancel-for-any-reason (CFAR) travel protection when they book their bus tickets.

“Bus travellers were equally impacted by cancellations and the many challenges that the travel industry has faced over the past few years. They had to abide by the same pandemic-­related protocols such as pre-departure checks and PCR tests, off-on government-mandated interstate lockdowns and running the risk of travellers or their companions contracting the virus itself,” says Pierce.

“Understanding that 16% of claims in Singapore [that] were made due to pandemic-related reasons were rejected, we quickly recognised that our partners needed to offer their customers peace of mind with protection that is purpose-built for travel in the ongoing and post-Covid environment.”

Land border crossings are extremely frequent between Singapore and Malaysia, with thousands of daily travellers exiting and entering the Causeway daily. Within Malaysia, travellers typically book their bus tickets three days before departure. With such a short lead time, Pierce says there is a clear need for technology to not just provide a seamless booking experience but also enable OTAs to be a one-stop shop servicing the needs of travellers.

“The amount of customers who purchase comprehensive protection at the time of booking remains high, even today. Travellers are confident enough to travel again but protection remains a priority. They are also facing an additional layer of uncertainty with increasing delays, staffing shortages, extreme weather conditions and more interrupting the travel landscape on a global scale,” he says.

Travellers are also opting to add protection at a rate six times higher than at the start of the pandemic. Travel protection is no longer an afterthought, says Pierce, but a must-have.

Cover Genius specifically foresees a demand for post-pandemic coverage, which includes features like the ability to customise plans to the itineraries of travellers in different geographical locations, and responding to frequent trip delays, lost baggage, and trip cancellations due to Covid-related reasons, he adds.

Skyscanner engaged Cover Genius in 2020 where the company created Covid Cover, a suite of hyper-relevant solutions that, importantly, had no exclusions for Covid-19: medical, trip cancellations — including cover in the event of denied boarding due to a failed health check — and airline insolvency cover. 

“Today’s consumers want fit-for-purpose protection that addresses their concerns rather than the one-size-fits-all blanket policies that haven’t evolved. At Cover Genius, we prioritise co-creating tailored solutions with our partners that address their customers’ concerns,” says Pierce. 

“We’re also seeing a demand for protection that includes features like the ability to cancel for any reason (such as our partnership with redBus), customise plans to the itineraries of travellers in different geographical locations, and respond to frequent trip delays, lost baggage and cancellations.

“By leveraging embedded insurance, travel providers, agents and their customers are set to benefit the most from this shift.”

Sales from Cover Genius’ global distribution platform XCover increased 667% this past year and it sold more than 10 million policies. Pierce says the firm has ambitious plans to continue expanding within Asia, within the embedded insurance travel space and in other industries such as retail, fintech, property and logistics.

“We’ve already seen immense interest in embedded protection, having recently signed major partners in the region like redBus, Agoda and Flipkart. We look forward to continuing our expansion to meet our vision of protecting all the customers of the world’s largest online companies.”

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