Digital Strategy Example: Travel Insurance Industry

Example of using value elements and target groups to build a successful digital strategy in the travel insurance industry.

The travel- and insurance industry are both experiencing big shifts in consumer behavior and market structure. Companies selling travel insurance are affected by changes in both industries. Key trends in the travel industry include the demand for adventure travel and travel to remote and untouched locations, as well as fewer barriers to reach these destinations1. Millennial consumers are used to booking flights and hotels online, thus skipping traditional travel agencies. On the insurance side, more – especially standardized – contracts are sold online or via price comparison portals. Once again younger generations are driving this trend and teaching their parents. How can executives develop better insurance marketing strategies to take advantage of these new trends?

While these trends clearly threaten many established business models, there are also new opportunities. If traditional businesses don’t act, new players will move in to occupy the space. One example of a company that has successfully occupied the travel insurance market is World Nomads from Australia. Founded by travel enthusiast Simon Monk they managed to gain a remarkable dominance in the industry. All that with a staff of just 6 people2.

World nomads is a superb example of how companies with the right digital strategy can thrive and take advantage of these new opportunities. In this article we will use David Roger’s value proposition roadmap3 to systematically rethink customer value in the travel insurance industry from the point of view of an established player.

Customer Types and Value

The first step is to define our current customer types and the value they get from our product. A big insurance company will have a large number of customer types. For this example we’ll focus on the niches served by World Nomads.

Table 1: Selected target groups for travel insurance
Target Group Description
Backpackers and independent travellers Travels for an extended range of time (months) in the course of a gap year or before starting a corporate job, travel as a way of self-realization, budget-conscience, but still concerned about security, insurance may be paid for by concerned parents, if in gap year, probably above-average income, fast traveler – only stays a few days to maximize places visited
Adventure traveller Travels to remote places to experience unique outdoor destinations, plans and prepares for trip well in advance, takes a calculated risk by engaging in activities, like diving, hiking or climbing, probably above-average income and education, enthusiastic about chosen outdoor activity

Having defined our target groups, we can move on to write down their value elements. Some of them may overlap.

Table 2: Value elements per target group
Target Group Value Elements Overall Value Proposition
Backpacker – Peace of mind in a new situation
- Point of contact in emergency situations
- Protection against smaller health issues (infections or traffic accidents)
Peace of mind while experiencing new situations and places.
Adventure traveller – Coverage of major accidents during risky activities
- Evacuation from remote locations
- High coverage amount
- Buys via specialized travel agent
Best available coverage for risky activities.

Emerging Challenges and Opportunities

In the second step we will look at opportunities and challenges emerging in the industry. One source of these are new technologies. For travel insurance, the internet clearly plays a big role. Customers buy insurance online, discuss your product in forums and blogs, read reviews and expect to submit claims electronically.

Changing needs are another source of opportunity. Customers demand coverage of risky outdoor adventures and insurance sums high enough to cover bigger accidents and expatriation. They also want to buy online and manage their services themselves on an online platform.

While there are no good substitutes that directly threaten the market for travel insurance, there are new competitors – like Word Nomads – placing themselves between insurance companies and consumers as new intermediary. By commoditizing the insurance underwriter they will likely decrease their margins.

Table 3: Emerging challenges
Source Example
New technologies Buy insurance online
Self-management platforms
Changing customer needs High-risk activities
Support hotline
New competitors Online intermediaries

Next let’s see how these changes affect our current value propositions.


Table 4: Status of value elements for Backpackers
Value Element Evaluation Verdict
Peace of mind in a new situation Still provided Safe
Point of contact in emergency situations Room for improvement Challenged
Protection against smaller health issues Provided Safe

Adventure traveller

Table 5: Status of value elements for adventure travellers
Value Element Evaluation Verdict
Coverage of major accidents during risky activities Usually not covered Challenged
Evacuation from remote locations Also not covered Challenged
High coverage amount Made to work in accord with regular health insurance Challenged

Offer new Value Elements

With a good overview of existing and threatened value elements, we can move on to create and assess new value elements by looking at unmet consumer needs and possibilities offered by new technologies.

Table 6: Possible new value elements
Source Possible new Value Elements
Consumer needs Start covering risky outdoor activities
Higher coverage for major outdoor accidents
Expatriation from remote areas
Flexible buying options while on the road
New technologies Market via blogs and social media
Sell online
Self-service platform to extend or make claims online
Online support to help inexperienced travelers
Global call center for big and small emergencies
Mobile app for travelers on the road and without access to computer

These new ideas together with existing value elements will give us a good idea of future priorities. One way to summarize them is by classifying them by core-, weakened-, disrupted- and new elements.


Table 7: Assessment of current and future value elements
Core elements Weakened elements Disrupted elements New elements
Peace of mind Point of contact in emergency situations Buys via travel agencies Self-service platform
Global call center for emergencies Support in new situations Cover risky activities
Coverage of smaller incidents High coverage amount Flexible buying options
Evacuation from remote locations Market via blogs and social media
Sell online
Online support for inexperienced travelers
Mobile app for travellers on the road

As you can see, even a short analysis uncovers a range of possible value propositions in the travel insurance industry. Many of them are already offered by World Nomads with great success. The question is why established players are so slow to find their own, while allowing themselves to be intermediated away from consumers.