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Disbursements

Taking The Sting Out Of Travel Delays With Same-Day Disbursements

For travelers who’ve ponied up for travel insurance, getting reimbursed for snafus same day, rather than waiting for checks in the mail, can make all the difference. In the latest Disbursements Tracker, PYMNTS caught up with James Serato and Alec Snetkov of Allianz Travel Insurance, who discuss how disbursement speed has become a differentiator for customers when choosing a travel insurance provider. Plus, the latest updates on faster disbursement debuts by insurers from around the space, inside the Tracker.

There are few things that can leave travelers more frustrated than a delayed flight.

Delays can quickly lead to passengers missing their connections or having their baggage misplaced in its journey to the final destination. What’s worse, travelers must then deal with airlines if they hope to be reimbursed for their troubles, potentially making the situation all the more frustrating.

These and other tribulations can have even the most eager vacationer wondering if it’s all worth the trouble, or if there is a way to be compensated without much hassle. The latter is being put into practice by travel insurance providers like Allianz Travel Insurance, which recently introduced a new program, SmartBenefits, to assuage travel pain points.

SmartBenefits allows customers to take out insurance policies that will compensate them with cash if their flights or baggage items are delayed, according to a recent interview with James Serato, Allianz’s retail channel manager, and Alec Snetkov, its director of new product development. Whether for travel or baggage delays, offering instant compensation goes a long way toward appeasing frustrated customers.

Easing travelers’ pain

While the Allianz team saw SmartBenefits as a chance to better serve customers, it wasn’t one it identified on its own. The program formed from increased demand for a service that would provide customers instantaneous compensation for time wasted and inconvenience caused by delays at the airport, Serato explained.

Receiving payments for travel issues can assuage customers’ frustration, but it doesn’t do much good to obtain that money via check days after a delay has been resolved. Consumers want prompt access to funds to pay for a meal or lodging when they’re stranded, Serato added, or to buy new clothes if their baggage is misplaced.

“We monitor interactions with [customers] and look for any sort of insights we can gain [into] the ways we can improve the customer experience for them,” he said. “As a result of that extensive surveying and understanding, we saw a potential area to improve the claims process.”

Allianz has worked to do that through direct deposit and debit card payments. Customers who purchase SmartBenefits coverage provide the company with flight information. If that flight is delayed, they are sent a notification prompting them to enter their payment information to receive same-day disbursements.

The service is appealing, but roadblocks to wider usage remain. Some travelers don’t know the service exists, for example, meaning Allianz must invest in consumer education and outreach efforts to expand the brand’s reach.

Others may not provide flight information, making it difficult to determine if they’ve been impacted by a delay. Some consumers may be uncomfortable providing real-time bank account information, too, and thus decide against receiving same-day funds. That’s a problem that has prompted Allianz to consider adding other payment methods, like peer-to-peer (P2P) payment apps, which are popular among certain consumer demographics.

“We’re looking to implement instant payment methods like Zelle,” Snetkov said. “We think that would be a logical next step.”

Accelerating disbursement speeds

P2P services would also allow the company to more quickly put claims payouts into consumers’ hands, Snetkov and Serato noted, making the program even more effective.

That’s crucial for insurance providers like Allianz. The company’s travel insurance provider status means that, unlike auto or homeowner’s insurance, their services are typically not required by law. It must look for ways to increase the value offered by its products, then, in part by giving consumers quicker access to their funds.

“In order to have a mortgage, you usually have to have homeowner’s insurance,” Serato said. “In order to be able to drive, you have to have auto insurance. But, we’re looking at a situation where our offerings [require] opt-in. It’s optional, so we need to deliver value in order to get people to come back and continue to purchase again. [Speed] is a differentiator in the marketplace for us right now.”

Consumer expectations surrounding payment speeds have also changed.

“People want things faster now,” Snetkov said. “They expect payments to process almost instantly. It’s a trend in the marketplace that I think involves all companies, including insurance companies.”

Consumers will likely expect faster insurance claim payouts as the speed of commerce continues to increase. Those funds may not make a traveler’s airplane leave any sooner, but they can help make the delay a bit more bearable.

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