Tune Protect, AirAsia work together to boost travel insurance take-up

PETALING JAYA: Tune Protect Group Bhd is embarking on a digitisation initiative with substantial shareholder AirAsia Bhd to boost the take-up of travel insurance, which is expected to drive a low double-digit growth in its gross written premiums (GWP) in 2018.
Tune Protect’s GWP increased 5.7% to RM501 million in 2016. It sold 7.1 million policies last year. More than 7,500 policies were sold via e-commerce. Despite the opt-in ruling, digital global travel business was still the largest contributor to Tune Protect’s bottom line.
“The penetration for Tune Protect’s insurance, even with the opt-in was 21%. Following what consumers want, we will adjust the product, make it flexible, rates will change depending on the destination, person ... we’re trying to give more value,” Tune Protect director and AirAsia group CEO Tan Sri Tony Fernandes told a press conference after Tune Protect’s AGM yesterday.
“This will increase the penetration of travel insurance and grow the earnings for Tune Protect and ancillary income for AirAsia. We’re using digitalisation to make insurance simple, both from buy and claiming.”
Through this collaboration, Tune Protect, in line with its aim to become a leading digital insurer, will leverage on AirAsia’s technology to digitalise insurance in the aim of providing a seamless user experience. Some of the many initiatives includes a one-click payment solution for “Manage My Booking” option with BIG Pay and seamless claimant journey portal to fast track the claims process.
“We’re going to make claims easier so there will be an increase in claims (ratio) but it will be adequately compensated by the volume,” said Fernandes.
Another key element of the collaboration is product innovation, such as bundling travel insurance with Premium Flex, Value Pack, Premium Flat Bed, Annual Pass, Family Plan and Migrant Plan; which are designed to increase demand for travel insurance. AirAsia will also synergise its digital marketing efforts with Tune Protect.
The collaboration will see AirAsia and Tune Protect optimising customer data for personalisation. This will include the introduction of premiums for travel insurance that are flexible and dynamic based on travellers’ data and market demands. Changes of premiums are to be controlled by pricing algorithms and business rules, which are gathered and developed based on key factors such as travellers’ demographic, destination and travelling dates.
Insurance will also be made available at airport counters for passengers before their flight departure and arrival at their destinations. The group is intensifying its distribution with an offline portal for offline business partners (group and agent bookings) to be able to add on ancillary services easily via e-commerce. Insurance contributes 5% to AirAsia’s ancillary business.
AirAsia has data from over 400 million guests carried over the last 15 years. With the advancements in data mining, together with AirAsia, Tune Protect is able to provide more policy choices for consumers. For example, millennials prefer to protect their devices and gadgets on trips, and need different offerings than Generation X. The collaboration will allow Tune Protect to create different offerings base and expand its reach further.
Meanwhile, Tune Protect group CEO Razman Hafidz Abu Zarim Razman said it expects the group to see a flat or high single-digit growth in GWP this year and double digits in 2018, driven by the digital initiative.
He said the group is still actively pursuing an acquisition opportunity in Indonesia.
“That has taken a bit of time (due to regulatory issues) but we’re still actively looking. I’m hopeful maybe we can share something this year,” said Razman, adding that it is talking to several parties.
Indonesia is the third largest market contributor to its travel business and the biggest market in Asean with a large number of its more than 260 million population completely unprotected.
“It’s a tough market to penetrate but we want to ensure we tie up with the right partner,” said Razman.