Carl Carter is a Strategic Adviser to Transfer Travel, the leading travel resale platform. With three decades of experience in insurance innovation, Carl advises companies on digital transformation and technology integration within the insurance sector. Here, he explains why the travel insurance sector must move beyond outdated claims models, or risk falling behind.
For decades, travel insurance claims have followed a predictable pattern. A traveller’s plans change, they cancel their trip, complete a form or call a service centre, submit documents, and then wait – often for weeks – to learn if their claim will be paid. While most other consumer services have evolved through multiple digital transformations, travel insurance claims handling has remained largely unchanged.
This inertia is no longer sustainable. As consumers increasingly engage with mobile-first brands offering instant service, the gap between expectation and reality in insurance continues to grow at a rapid pace. Insurers must adapt or risk becoming commoditised to the point of unprofitability.
The pressure points driving change
So what’s changed? The technology for travel insurance salvage rights of travel cancellation claims has been around for a while, so why is now the critical time for insurers to embrace it? Simply put, the convergence of these pressures has created a tipping point. Insurers who act now to integrate digital travel resale and salvage capabilities will gain a competitive edge in cost control, pricing, customer satisfaction, and market differentiation. Those who wait risk permanent disadvantage in an industry where margins continue to shrink.
I’ve watched consumer expectations evolve dramatically over thirty years in this industry. Today’s travellers won’t wait weeks for claim outcomes – not when they’re managing their entire trip on a smartphone and expect insurance to keep pace. When it doesn’t, they switch travel insurance providers.
Meanwhile, comparison sites have squeezed premiums saving money for consumers but putting pressure on insurers. Gone are the days when insurers could compete on brand and service alone. Every penny counts when consumers can compare twenty quotes in seconds. At the same time, travel costs (particularly airline costs) are consistently outpacing general inflation year after year, pushing up the average cancellation claim value. Insurers simply can’t pass these increases on to price-sensitive consumers anymore.
The answer is digital salvage
The motor insurance sector has long benefited from salvage operations and revenue to recover value from written-off vehicles. Until recently, no equivalent existed for travel insurance – when a trip was cancelled, the monetary value was simply lost and the travel provider resold the same booking.
This is now changing. The rise of peer-to-peer resale travel platforms allow non-refundable bookings to be relisted and resold, creating a salvage opportunity for cancelled trips. Much as the eBay model revolutionised second-hand retail, these platforms create value from what was previously considered worthless.
The most forward-thinking insurers are already exploring API integration with these marketplaces, which will allow for an automatic re-listing of cancelled bookings. This approach offers dual benefits: reducing net claim costs while providing policyholders with faster, more satisfying resolutions. For insurers facing claims they cannot pay due to policy exclusions, these platforms offer a third option. Rather than simply rejecting a claim and risking customer dissatisfaction, insurers can instead offer a clear ‘sign posting’ solution for travellers to recoup some of their costs through resale, building loyalty, improving customer service and retention, and differentiating service.
Future-proofing our industry
When operating in a market where pennies make the difference between profit and loss, holiday re-sale innovations can transform underperforming lines into profitable ones.
The travel insurance claims process of tomorrow will bear little resemblance to today’s paperwork-heavy ordeal. Policyholders will initiate claims through mobile interfaces, receive instant verification through connected systems, and benefit from multiple resolution options beyond the binary ‘paid or denied’ outcomes of the past.
Insurers who resist this digital change won’t just struggle – they’ll disappear. This shift isn’t just about efficiency, it’s about survival. We’ve already witnessed this pattern with traditional banks that initially dismissed fintech innovations, only to find themselves racing to catch up or becoming acquisition targets. The industry is at a tipping point, and the time to act is now. I just hope insurers don’t wait for the challengers to arrive before they decide to innovate – by then, it may be too late.
