AIG underscores travel insurance shortfalls in current ecosystem

Travel insurance shortfalls - Hand - Airplane

The changing nature of the travel industry as a whole has caused coverage to fall short of what it should be.

AIG recently released a report on the current travel insurance shortfalls as travelers leave their agents behind. The report was titled “Insuring Travellers in the Digital Age.”

The current travel comparison trend is boosting convenience but is leaving travelers under-insured.

The AIG report pointed out that the average traveler will visit 28 websites throughout the 53 day period before they book their trips. The internet is offering them tools and resources never available before. Today, they can bundle their flight, accommodations and even car rental in a single booking with live pricing. Before these features were available, consumers had to obtain the assistance of a travel agent.

“As travel has also become more accessible and affordable, more and more customers are turning to online travel planning,” said AIG Travel CEO and president, Jeff Rutledge.

With all this savings and convenience, consumers face travel insurance shortfalls of which they are likely unaware.

The report also pointed out that travel insurance trends simply have not kept up with the way consumers book their trips. Websites, airlines, hotels, car rental companies, attractions and even destinations as a whole have taken a sharp turn toward online resources, tools and bookings.

On the other hand, the report says travel insurance selling has fallen behind. It is, of course, possible for travelers to purchase their insurance policies online. However, the industry’s offering of static products has not kept up with the way people shop, says the report.

“Travel insurers’ standard method of filing bundled packages requires additional time and resources to deconstruct and re-assemble isolated units of coverage,” AIG explained in its report. “This traditional approach limits travellers’ flexibility in selecting personalised coverage, and leads to unnecessary costs for both partners and customers.”

Trip booking is now a far more personalized experience than it once was. Therefore, reservations are not always made through a major tour operator with the insurance offerings ready to be made. Among the top travel insurance shortfalls is that it simply isn’t being placed in front of travelers at the time of their bookings, said the report. It is up to the industry to change that trend and to learn how to keep up with its target market’s shopping habits.

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