In conversation with Blink Parametric
Can you introduce Blink Parametric?
Blink Parametric provides parametric insurance solutions to consumers worldwide. We work with insurers, brands and affinity groups, to provide real-time customer assistance. Currently, Blink Parametric is focusing on travel-related disruptions and personal cyber dark web monitoring solutions.
As Blink Parametric’s Chief Commercial Officer, I am responsible for global sales, marketing and distribution. I have worked in insurance for over 25 years as Managing Director at an international MGA, a global travel claims and assistance company and other organisations focused on travel and consumer insurance.
Blink Parametric specialises in improving the claims process for travel disruption. Can you describe how the claims process traditionally works for travel insurance?
In the last 25 years, there has been very little innovation in travel insurance, particularly for high-volume, low-value claims such as flight disruption and lost luggage. These are common occurrences for travellers and have become more frequent since the COVID-19 pandemic disrupted global travel. Something as seemingly small as a delayed flight or delayed luggage can cause real frustration and inconvenience for a traveller and is much more likely to happen than a medical emergency.
Traditionally, when the claim is not a medical emergency, travel insurance policyholders are limited to ‘pay-and-file’ or ‘reimbursement’ claims. This means the policyholder has to deal with the problem themselves, pay for it and then claim money back from their travel insurer after they return from their trip.
Can you describe the claims process for flight disruption and lost luggage specifically?
For flight delays and cancellations, the traditional claims process is particularly frustrating for consumers because they are trying to reach their destination or return home, and their insurance policy cannot immediately help them. Consumers need to pay out of pocket and also make their own arrangements at a time of frustration and possibly in a unfamiliar location. When they return, they need to find their policy wording, request a claims form, complete it and send supporting evidence before their insurer manually reviews the claim and eventually sends payment. On average, it can be between a month and six weeks from when a flight delay occurs to when the customer receives their claim payment, leaving them out of pocket in the interim.
The process is similar for lost or delayed luggage claims. If a customer’s luggage has not appeared at the airport, they have to speak to the airport’s luggage service desk to receive a Property Irregularity Report (PIR). The customer then on their return home has to find their policy wording and request a claims form, fill it in and send the PIR to their insurer. The claims payment may take a month or longer from when the luggage was first lost.
What are the shortcomings of this traditional process for insurers?
Travel insurance claims peaks have always been seasonal, and travel insurers assume seasonal variation when deciding resourcing for claims handling. More recently, two factors have made it harder for travel insurers to resource travel claims handling. Many people left the travel insurance industry during the COVID-19 pandemic and have not returned, leaving a shortage of insurance claims handlers now that widespread international travel has resumed. Meanwhile, climate-related events are causing more travel disruption.
One recent example is the December 2022 North American winter storm, which resulted in over 11,000 flight cancellations in one week. Travel insurers were faced with an extraordinary volume of flight disruption claims in a short period of time, known as a ‘surge situation’. In a surge situation, travel insurers are unable to process claims in their normal turnaround periods. Some insurers have had backlogs of more than 100 days to manage flight delay or luggage delay claims. This has a knock-on effect for other claims and service situations. Consumers experience delay, dissatisfaction and disruption, so they make even more follow-up calls and complaints, creating additional cost for insurers.
How does a parametric approach to flight disruption and lost luggage claims work?
A parametric solution for travel disruption claims integrates with data feeds from airlines, airports and luggage handling databases worldwide to detect when a flight disruption or verify a luggage delay has occurred. The customer can be automatically notified by Blink Parametric’s system of the disruption and receive assistance in real time having registered their relevant flight prior to departure or by using their PIR number received from the luggage handlers or airline.
If someone’s flight has been delayed by, for example, three hours (or any period as defined in the policy), they can receive an instant branded notification from their insurer offering them a lounge pass, cash payment, hotel accommodations or options to rebook their flight. The customer does not need to fill in forms, submit receipts or make telephone calls, and the insurer does not receive claims forms and documents that they need to review and adjust manually. This turns what could historically be a negative consumer experience into a very positive one, where the customer’s needs are met in real time by their insurer.
For luggage delays, customers need to enter their PIR reference number into their insurer’s app or website. The parametric solution can search global luggage databases to provide updates on where the luggage is. If the database shows that luggage is still not found within a period of time defined by the insurer, such as half an hour, the customer receives an instant payment to buy essentials such as spare clothes and get on their way. If the luggage remains lost for an extended time, such as 48 hours, the customer can receive a second payment to cover costs for the rest of the trip.
How are customers responding to parametric solutions for travel disruption?
Blink Parametric has undertaken consumer research that shows 75% of all travelling consumers were either very interested or somewhat interested in a real-time flight delay solution. 68% of travelling consumers were either very interested or somewhat interested in a solution that provided a real-time benefit if their luggage was lost or delayed.
How widely used are parametric solutions in the global travel insurance market today?
Over the last six to twelve months we have seen exponential growth in demand for parametric travel insurance solutions. Travel insurers are increasingly understanding how parametric solutions bring operational benefits and savings, and they are also responding to consumer demand.
Several early adopters of Blink Parametric’s flight delay solutions were in the Canadian travel insurance market, where its technology was first deployed in 2016. Now, parametric flight delay solutions are becoming a market standard in Canada. 70-80% of travel insurance requests for proposals and tenders – procurement requests from organisations looking to purchase travel insurance – typically expect a parametric solution.
That trend is being followed in other parts of the world where parametric solutions are being deployed, across North America, Latin America, the UK, Europe, the Middle East and Asia.
What does Blink Parametric offer?
Blink Parametric provides white-label customisable parametric insurance solutions to insurers and brands globally. Blink Parametric’s technology integrates with insurers’ and brands’ existing systems through APIs and works in multiple languages and currencies.
As well as the company’s core specialism in travel disruption, Blink Parametric also provides personal data monitoring protection with real-time resolution for personal or small business data breaches. It has a number of other products in development or testing, including parametric travel weather insurance, business interruption solutions for small and medium-sized businesses and using internet-of-things (IoT) technology for personal energy insurance.
What companies is Blink Parametric working with that you can name?
Blink Parametric has solutions live across several partners including Blue Cross Canada, TuGo, Awaycare, Manulife and Just Travel Cover.
What impact do Blink Parametric’s solutions have on the companies you are working with?
Blink Parametric partners see reductions in claim processing time of 99% using its technology, which improves their customer experience and lowers claims handling costs.
Parametric solutions also provide commercial benefits. Many brand partners see increases in total sales of between 5% and 10% after deploying parametric flight delay or cancellation solutions. One Blink Parametric partner recently deployed the parametric lost luggage solution, embedded on their highest level of coverage (the ‘gold’ package) and optional paid add-on for other levels. The partner saw an increase of 12.5% in sales for the gold package, and for the other packages the lost luggage cover became their most popular add-on out of a range of possible add-ons. For inbound calls to their sales centre, 23% of customers chose to pay extra for parametric lost luggage coverage, and even online 6% of customers chose to add lost luggage cover.
What should readers do if they want to learn more about Blink Parametric?
Anyone in travel or consumer insurance, including insurers, brands, financial institutions and distribution channels, interested in parametric solutions can download our free ebook on 5 Ways Parametric Insurance is Transforming Travel Insurance & Customer Protection by clicking the link here or reach out to us for a direct follow up on our website, www.blinkparametric.com. We are happy to discuss their objectives and see where parametric solutions could benefit them or their customers.