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Explore the rising trend of embedded insurance in the MEAPAC travel industry, as discussed by Daniel Nordholm, Managing Director of HBX Group Fintech, at the MarketHub Asia Conference in Bangkok. Discover how personalized insurance and payment solutions are reshaping the travel and hospitality landscape.
The MarketHub Asia Conference, organized by Hotelbeds, recently convened in Bangkok, Thailand, bringing together 300 delegates from the travel and hospitality industry to delve into the latest trends reshaping the sector. One of the focal points of discussion was the role of embedded insurance in the MEAPAC (Middle East, Asia, Pacific) travel industry. TravelDailyNews Asia-Pacific had the privilege of conducting an insightful interview with Daniel Nordholm, Managing Director of Fintech at HBX Group, shedding light on this transformative trend.
Embedded Financial Services: A Macro Perspective
Embedded financial services, including insurance, are emerging as a significant trend in the travel and hospitality sector. The objective is to streamline access to various financial and insurance services for industry stakeholders. Rather than seeking insurance from multiple providers, the aim is to provide a seamless connection through APIs and connectivity offered by HBX Group.
Integration of Insurance into Travel Packages
One noteworthy development is the integration of insurance into the initial travel package price. While customers retain the choice to opt in or out, there is a discernible increase in the adoption of single-trip insurance. This surge can be attributed to the lessons learned from the COVID-19 pandemic, which underscored the importance of being adequately protected during unforeseen circumstances.
Tailored Insurance for Specific Trips
What sets embedded insurance apart is its ability to offer tailored solutions for each specific trip. Whether it’s a skiing adventure in Canada or a beach vacation, the insurance coverage is designed to match the nature of the journey, providing peace of mind for travelers facing potential risks.
Post-COVID Awareness and Adoption
The COVID-19 pandemic prompted a spike in travel insurance adoption. Travelers experienced cancellations and financial losses due to inadequate insurance coverage, which led to a heightened awareness of the need for specialized, trip-specific insurance policies.
A Broader Industry Trend
The trend towards embedded insurance is not confined to HBX Group alone. Traditional insurance companies are also recognizing its potential. However, the challenge for traditional carriers lies in reaching travelers effectively. This is where the extensive network and data insights of companies like HBX Group come into play. They serve as intermediaries that can strategically position insurance products for their clients.
Reduced Risk for Insurance Companies
Contrary to what one might assume, embedded insurance actually reduces risk for insurance companies. By leveraging a wealth of data, including traveler history and precise booking information, insurers can craft policies that are highly personalized. This accuracy allows travelers to pay only for the coverage they genuinely require, eliminating unnecessary expenses.
Streamlining Payments in Travel and Hospitality
Apart from insurance, HBX Group also addresses payment challenges in the travel and hospitality industry. Travel payments can be intricate due to the time lag between booking and consumption. Multiple payment events, involving travelers, travel agents, intermediaries, and hotels, can complicate matters.
Optimizing Currency Exchange
A significant portion of transactions within HBX Group involves currency exchanges. Managing currency fluctuations is critical to avoiding additional costs. Effective currency risk management, such as hedging, plays a pivotal role in ensuring financial stability throughout the payment process.
Future Trends: Enhancing Travel Payment Experiences
Looking ahead, the focus remains on enhancing the traveler’s payment experience. This involves enabling payments in local currencies and accommodating various payment methods. The goal is to optimize payment processes to retain funds within the travel ecosystem, benefitting both travelers and industry players.
In conclusion, embedded insurance and streamlined payments are poised to redefine the travel and hospitality industry. With a focus on personalization and efficiency, the sector is adapting to meet the evolving needs of travelers and industry professionals alike.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
