Anthony Spiteri is CTO at battleface, a full-stack global travel insurance company enabling customers and partners to easily select custom-built products and services that perfectly fit their needs. Anthony was interviewed by Michael Fiedel, a Managing Director at InsurTech Ohio and Co-Founder at PolicyFly, Inc, in collaboration with The Future of Insurance Newsletter.
Anthony, travel insurance has been rather underutilized in the US. Why has that been the case?
“It's a unique situation here compared to the rest of the world. There's a couple of factors that lead to it. One of them is trust in the products. A lot of people either have had negative experiences, or they've heard about negative experiences through others or simply find products irrelevant. This is a big problem because then you have no faith in the product, so people think it's just extra frivolous or a waste of money. They don't think it actually works, or they don't think there's going to be a scenario in which it's going to be useful to them. Another key factor that we found is many Americans think their domestic health insurance policy will protect them internationally when most often, that’s not the case.
The reality is, travel insurance can be a complex product, especially for those who may not travel frequently. It's not like auto insurance or home insurance which is part of day-to-day life; it's something that certainly requires more education.”
How is battleface repackaging and customizing travel insurance to offer something more unique?
“A lot of travel insurance companies continue to repackage the same one-size-fits-all product. You have prepackaged products with a lot of coverages that you may or may not need. You might feel like you're overspending, or you might look into it and think, ‘Oh, well I already have this’ or ‘That's not really going to happen to me.’ A great example is if it comes with baggage protection, and you travel with no checked luggage. You travel with a carry-on; you don't need to pay for baggage. These products were created a long time ago where the travel habits of people were very different. In the last few years and with COVID-19 especially, travel habits are changing continuously.
People are traveling a lot differently. A lot of people want to travel more because they've been locked down for so long, or they just didn't have the opportunity before. The products and tech that we're building are modular, or unbundled – not pre-packaged together without opportunity to customize based on your unique needs. You can choose what you feel is relevant. We're even getting to a stage where our platform will recommend what benefits you should or should not be adding based on your age, where you're going and what you intend to do on your trip. That's where we see it heading and how we're going to continue to set ourselves apart from traditional travel insurance companies.”
How is technology playing a critical role in allowing travel insurance to be more effective as an option?
“A big part of it is modularity. We were probably the first in the industry to give people a choice. You don't have to purchase an entire package of coverages, some of which you might not need. Another part is getting back to the educational component. For example, when you travel to Thailand, you are required to have a minimum of roughly $25,000 for travel insurance. The reality is, if you have a medical emergency while in Thailand and go to a private hospital for care, that amount is most likely not going to be enough. Our advanced technology will recommend higher coverage for this location based on this type of background information. You don't have to purchase it, but the ability to allow customers to make an informed decision is critical. We’re taking similar approaches for our distribution partners. By embedding the product for their given demographic and/or destinations that they provide for, we're able to customize the products for them, so they can provide more relevance to their own customers. That way, they establish a better relationship on a B2B level.”
What are some of the technologies that are going into providing such a simplified front end experience?
“A lot of it is data science, AI and machine learning. The reality is these technologies have existed for years but haven’t been adapted by our industry - there’s been a lag on implementing these types of solutions. We hope our investment and commitment to evolving our capabilities so quickly will push the rest of the travel insurance industry to do the same. We’re seeing a lot of the big IPOs happening inside the insurtech space, but it’s still behind the curve as it's a lot smaller compared to other traditional types of insurance. It's not like we're reinventing the wheel, and the technology is there. It's just how to make use of the technology in a way that works for our partners and customers.”
How do you foresee travel insurance continuing to evolve?
“As the industry catches up, making the experience really easy for consumers to understand is key - ensuring they're not under buying or overbuying protection for example. Under-selling is a problem because we don’t want customers to think they are covered for things when they really aren’t. The reality is the status quo has worked globally. It's something that sells, especially, in regions where people travel a lot for business or for leisure. But the status quo isn't always right. That's why it's in an industry that's right for disruption.
With the continuation of building custom products and modular products, people are going to get more value, and once they realize there's more value, the products become more relevant to them. I think before the pandemic, almost 80% of Americans traveled without insurance. The education element is going to be a huge part of showing consumers the relevance and importance and why you should always purchase travel insurance when you leave your home.”
Is there any one demographic that is a bit more receptive to travel insurance?
“Traditionally, the older demographic, especially those traveling on more expensive trips, purchase travel insurance. For example, imagine an older couple going on a three-week vacation to Europe. They would almost definitely have travel insurance versus college kids going on a cheaper spring break. That's really the big difference from the past, as the healthcare debate in the US and COVID-19 awareness really helped to attract the attention of the younger demographic. In fact, at battleface, most of our customers are under the age of 30. With the increase in mobile app integrations we’re seeing, people are certainly becoming more aware. Buying insurance is easier and more accessible at our fingertips than ever before, which is changing the way the world views travel insurance.”
How important is being embedded at the moment of buying a travel package to this type of experience?
“This is something we've worked on extensively at battleface. We’re perfecting our public API, and we’re working with several fintech, insurtech, traveltech, OTAs (online travel agencies) and airline distribution partners. That could be post sales, or it could be integrated within a sales platform or offered as an add-on. It's definitely one of our main points of concentration right now. Specific to traditional OTAs and airlines, it's a market that has been difficult to penetrate because historically, there were a lot of high commissions at play. For example, you would have a travel protection plan offered by an airline where they were getting anywhere between 60 and 80 percent of upfront commission on that product. The bottom line isn't huge. What happens is you see a very degraded product, which affects people's perception and contributes to low conversion rates. Again, coming back to the first question of why travel insurance is viewed as unnecessary – we are working hard and as rapidly as possible to change the perception of those who may have had a horrible claims process experience in the past, or worse, aren’t clear on how the coverage applies to their trip specifics and unique needs. The battleface solution enables partners to deliver relevant products at the right time, which ultimately contributes to higher conversion rates and a better customer experience overall. Our custom-built products for partners convert at 20% vs. traditional products with an industry standard of 8% conversion.”