Travel insurance providers are getting better at collecting, storing, processing, and leveraging customer data. This is transforming the world of travel insurance.

An intelligent approach to data can life easier for insurers and travel agents while ensuring customers can enjoy enhanced security, superior cover, and an overall better customer experience.

How Data is Being Used in the Travel Insurance Industry

The vast majority of travel arrangements are made online, which means that travel companies and insurers are constantly collecting a huge amount of customer data.

Meanwhile, regulations such as GDPR and The Data Protection Act mean that businesses cannot take their customer data for granted. They must instead take great care in what data they collect, how they collect it, and how they use it.

Artificial intelligence (AI) has proven invaluable in helping businesses process this massive amount of data. You can read our full guide to the role of AI in insurance. But in short, AI has already radically transformed the way insurers work.

AI modules have allowed insurers to automate certain repetitive tasks. AI modules can also quickly process immense datasets before automatically generating insights that insurers can consult when conducting risk assessments or developing new products.

How Data Might Change Travel Insurance in the Future

We have already seen examples of travel insurance providers leveraging their data, often with the help of AI, to transform their products and services. Below we will list some ways the industry may change in future years, as AI technology gets more sophisticated and more widespread.

Using AI for Bespoke Policy Creation

KPMG has started using AI as part of their global smart audit platform. Their auditors can now use advanced AI modules to quickly review documents to immediately identify risk factors, helping them to respond quickly to emerging risks.

It is easy to imagine how such technology could eventually dig even deeper into the customer data. As well as identifying risk factors, generative-AI modules may one day be able to detect customer cover needs, or even their personal preferences.

Insurers may soon be able to turn to AI modules in order to automatically tailor bespoke travel insurance policies that immediately meets all of a customer’s requirements – including their budget.

Faster Claims Settlements Through Automation

An automated claims process means that customers can, in theory, make a claim on their policy and quickly receive a settlement at any time, and from any place.

Imagine a customer getting stranded at an airport due to a cancelled flight, or learning that their accommodation’s been cancelled while they’re already on the plane. Customers could make a claim at the touch of a button using a dedicated app on their smartphone. AI could then take over and provide them with the settlement to which they’re entitled in no time at all.

We have already seen examples of insurers making use of data and AI to streamline the claims process. Indeed, one tool is capable of predicting flight delays, meaning it can compensate customers affected by disruption before they even have to make a claim.

At the moment though, these modules are only handling straightforward claims. A cancelled flight is cut-and-dried – there is no question that the customer is entitled to a settlement. Yet in time, AI might get so sophisticated at reading and interpreting customer data that it will be able to manage more complex claims, such as those concerning overseas injuries.

Using AI Modules for Improved Insurance Fraud Protection

Along with identifying customer trends and risk factors, AI modules may also be able to detect possible fraudulent behaviour hiding in the datasets.

AI modules are good at identifying patterns, and there are usually strong patterns underpinning many varieties of insurance fraud. The problem is that these patterns often go unnoticed for far too long, meaning that insurers may not spot the fraud until it’s too late. But AI modules can quickly highlight possible red flags for insurers to investigate further, allowing them to respond to frauds faster than ever before.

EY has been using AI in their auditing from as early as 2018. More recently, they have experimented with AI for fraud detection. It’s still early days, but apparently the technology has great potential.

How We Use Data To Deliver A Service You Can Trust

At Capacity Insights, we are deeply invested in the potential of data to provide the best possible products and services to our customers.

We draw from predictive modelling, dynamic analytics, and other data science systems to drive our underwriting strategy.

Find out more about how we use data science insights to create our bespoke insurance schemes.