Creating a new travel insurance product in a pandemic: Hotspot Cover

 

Mark Butler, Co-founder and Director of Hotspot Cover, spoke to ITIJ about identifying gaps in the travel insurance market, creating a unique underwriting matrix and how we launched Hotspot Cover during the pandemic. 

Identifying what the travel insurance market needed

The founders of Hotspot Cover have been involved in underwriting or placing these sorts of risks with insurers and the Lloyd’s market for over 20 years, which enabled us to understand the challenges of the market over a number of years, and the high minimum premiums for customers seeking this coverage. Not only is it a challenge for the customer to find appropriate cover at an affordable rate, in time for their trip; insurers and brokers find it incredibly time consuming and the opportunity cost isn’t worth it. So, we feel this product fills the gap for both the customer and the industry at large.

Overcoming product development hurdles

Developing a product for a new distribution channel always has its challenges, but all of the markets and distributors we spoke to about it agreed that bringing some commoditisation to an antiquated market with few options for the target audience was the right solution, so we had support from quite early on. We also wanted to ensure the proposition had underwriting integrity whilst allowing customers to be able to quote and buy within minutes through a simplified user experience. This resulted in us having to create the underwriting matrix from scratch, but at the same time matching this with the vast amounts of data we had to ensure the rates were still maintaining their underwriting integrity.

Providing bespoke policies on an on-demand basis

As mentioned above, the insurance market could instantly relate to the combizom and heavy administrative burden writing policies like this took, so it wasn’t a challenge to convince insurers and reinsurers of this. Rather, it was a case of them agreeing to the underwriting matrix, which stood the test when reviewed, given the vast experience within the team. Then it was a case of choosing the right partners who bought into the strategy and long-term vision of Hotspotcover.com, because at the end of the day, it’s still a startup looking to disrupt the current insurance market approach, and needs alignment on vision.

Partnership with MBL Global

Adding the trauma counselling service and coverage to all policyholders is something we’re extremely passionate about. This is a unique additional coverage that isn’t typically offered by traditional insurers; however, we feel it is completely overlooked. Customers travelling to high-risk regions are more likely to require post trauma care if something does go wrong. Hotspot Cover chose MBL Global due to their superior service. MBL are able to have boots on the ground taking care of our customers in over 190 countries, covering 70 languages, typically within 24 hours.

On-the-ground assistance partners

Ultimately, during the planning phase of the Hotspot product, we were acutely aware that our reputation, and the promises we make to our travellers, are intrinsically linked with the capabilities of the assistance and response provider we choose to contract with. Therefore, it was also crucial that we partner with specialist underwriters that allow us to select the emergency assistance and crisis response provider of our choice.

Due to their experience in high-risk environments, their extensive and robust medical, transportation and logistics networks, and their on the ground capabilities in complex regions, we chose to partner with Inherent Risks. Their service level agreements are difficult to beat, with all requests for emergency assistance received by email being responded to within 15 minutes, and all calls within three rings. In complex regions, this can mean the difference between life and death. And from a cost containment perspective, it means that travellers are instantly referred to trusted medical network providers.

Travel assistance outside the normal parameters

When thinking of a case that tested our mettle, what immediately springs to mind is a recent request by a media agency who were deploying several journalists into Afghanistan for the first time since the country came under Taliban rule. Inherent Risks were heavily involved in ‘hibernating’ and evacuating expat and local staff of client companies in the days and weeks following the coup by the Taliban. We asked them the question, ‘can you still support clients in Afghanistan’? Unlike other companies we had asked previously who either said no, or others who gave an immediate yes, but could not prove their capabilities, Inherent Risks asked us to standby while they checked due to the daily changing situation on the ground. After confirming their current capabilities, they provided a detailed report to us that included the number of expat and local retained consultants still in country and their locations, and the amount of confirmed safe houses and approximate locations. This level of professionalism and due diligence has been repeated time and again for similar assignments in Gabon, Benin, Mozambique, Morocco and Iraq. 

Auther: Mark Butler - Hotspot Cover

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