A Signature Media Publication

Would you like Travel Insurance with that?

Jonathan Cooper is managing director of Worldwide Insurance Solutions (WIS)


Ancillary revenue has never been more important to the travel trade. The need to maximise the ‘$’ value of every customer touch point is critical as margins on flights/hotels continue to be squeezed. The principle of “would you like fries with that?” or upselling is widely established. Why then does the trade not fully capitalize on the travel insurance opportunity?

It is reported that ancillary revenue driven through airlines now exceeds US$ 49 billion globally, and a significant contributing factor to this revenue that flows directly to the bottom line is travel insurance. Of course, travel insurance is not just about commercial opportunity; it’s about providing valuable customer protection and assistance during the trip to ensure that, if the worst happens, there is coverage available to assist the customer and cover financial liability. Travel insurance is more than just an administrative process to secure a Schengen Visa. That’s why, in more mature markets, penetration rates can be as high as 85%. That’s 85% of customers that are well-protected, but imagine that conversion rate from a commercial perspective and added value to your bottom line? The untapped commercial value in the region is significant.

So why is it then that travel insurance conversion through travel trade in the region is still so low, with a likely conversion rate averagely below five percent of all outbound travellers? Here are a few thoughts on why this might be:

The Question Is Not Always Asked By the Agent

Imagine, conversion levels through online portals, including airlines and online travel agencies in the region, will averagely exceed 15%. Why? The customer is always asked the question in the booking path. Yes, without human intervention, if the “travel insurance question” is always asked of the customer, the conversion rate will be higher. Just think what can be achieved if a well-trained travel agent is asking the question? We would likely see conversion rates being achieved at far higher levels, and perhaps on par with more mature markets were significantly higher conversion levels are achieved.

Sales Management

Far too often, there is a lack of structured performance management to measure sales staff. Each travel agency needs to ensure that every front-line agent is measured and targeted as part of their role profile/objectives to ensure desired conversion rates are achieved.

It Isn’t Necessary!

The level of understanding in the market, certainly at the consumer level, means that there isn’t a ‘pull’ by the consumer to ask for the product. Often, travel insurance is seen simply an administrative function to obtain a Schengen Visa. This couldn’t be further from the truth. Additionally, there is a misconception that “free” travel insurance policies provided by the banks and all medical insurance policies will provide complete coverage when the customer is overseas. That is not necessarily the case, not in all cases anyway. And, if the worst happens, with medical expenses overseas for a serious accident or illness running into hundreds of thousands of $’s, why would anybody take the risk of not travelling without travel insurance? The travel trade has a role to play in educating the customer and explaining the benefits when the travel arrangement is made, for every booking.

The opportunity to protect the customer through doing the right thing and explaining the benefits of travel insurance is significant. Perhaps now is the time for the travel trade to fully realize the potential of travel insurance and ensure that frontline staff is well-trained and performance managed to offer this important ancillary product to every customer. There is significant untapped value for both the customer and the business.

The author has worked within the travel insurance industry for over 30 years throughout the world with some of leading names in the business. WIS, works with its partners to bring a range of ancillary revenue products, including travel insurance, luggage tracking tags and lounge access, hosted on its easy-to-use, proprietary platform – WISconnectz.