Travel claims lead to piles of paperwork, delays in payment and poor customer retention rates. Sharon Haran, the CEO of PassportCard, says that it’s time to bring the sector out of the Stone Age
On average, says Sharon Haran, it takes 45 days to complete a travel claim.
In many cases, the settlement leaves both the customer and the insurer unsatisfied. For the former, it means a long wait between injuring your leg in a fall in, say Rome, to receiving a cheque through the post back in the UK. And for the latter, it means having to deal with claims where a doctor may decide to do five MRI scans – and charge thousands of Euros – on what was just a badly bruised thigh.
This all leads to a drawn-out cycle of frustration for both parties. Policyholders resent all the form filling while disgruntled insurance employees sit in back offices and check try to make sense of the paperwork and invoices written in terrible handwriting by rushed medical staff.
“It’s still a long, tedious process and I think it’s one of the last services, worldwide, that takes so long to complete,” says Haran, the CEO of PassportCard.
“Today it takes seconds to get a loan and minutes to get an airline ticket; financial services have become much more accessible. But when its come to claims, then the insurance industry is still working in the Stone Age.”
Haran is on a mission to drag travel insurance into our digital fast-paced age. His company, PassportCard, is a joint venture between White Mountains Insurance group and DavidShield.
PassportCard users don’t need to worry about out-of-pocket expenses, paperwork or a long wait for their claim to be processed. Instead, they are handed a debit card, issued by MasterCard, when they take out a policy. This card allows them to call a 24/7 customer care line when they are in need of medical attention.
“When a policyholder calls the assistance company they are walked through a short questionnaire,” explains Haran.
“This is designed to analyse the customer’s situation, prevent fraud and then decide what they are eligible to receive in payment for the specific treatment that they need.
“We then automatically transfer over the funds to the card. The customer goes to the clinic, and pays with our card. We get a notification through MasterCard’s systems regarding the transaction along with all the relevant data, and then at that point in time the claim is almost closed.
“We have all the relevant information about the situation, the insurers know the payment that was made, and there is no additional data needed to issue the claim file.
“At that point in time, the claim is closed from our point of view and also the customer’s – so there is no need to fill up claims forms or to send receipts or follow ups.
“The claim is settled in real time, in less than a few minutes.”
Using technology and algorithms
Haran says that PassportCard had two main assets in its hands when it took its first steps towards launching the product in Israel.
To start with, the company had a very robust database that was built over 15 years. It includes the claims history and cost of claims in 150 countries around the world. Using this data, the company was able to design an algorithm that can predict the cost of a specific claim in any given territory – whether it’s a dentist in Bucharest, or a general practitioner in New York.
Then, he and his colleagues decided to utilise payment platforms that already existed in the market in different forms.
“We thought that the integration of an online immediate payment platform with this database could be a great way to simplify the tedious claims process that this market currently has,” says Haran.
Benefits to insurers
PassportCard also gives insurers some crucial advantages, such as first notification of loss. It means that the customer informs the insurer, in real time, before the expense is actually made. This, says Haran, allows insurers to prevent any unnecessary escalation of a claim.
It also allows insurers to steer customers towards doctors and clinics that it has connections to.
Haran explains: “Today, most travel insurance and assistance companies are investing a lot of effort into being able to build robust reliable networks around the world. But the key challenge is how to steer the customers to this network that they have built.
“Because today if you’re in Mallorca and you fall ill then you will probably go to the concierge in a hotel and ask who the nearest doctor is. Then you go there and pay the bill, without notifying your insurer in advance.”
As well as being able to make full use of a network, insurers can also control cost to a certain extent, even when the algorithm is misfiring.
For example, if it decides that a claim should cost £200, but a doctor wishes to charge closer to £1,000, then assessors have the ability to negotiate with clinics in real time. Given this level of real time oversight, using PassportCard is also a great opportunity to prevent fraud, according to Haran.
It also negates the need for large back offices, trawling through mountains of paperwork, giving insurance companies the chance to implement structural changes within their travel divisions.
And the users have given it the thumbs up too. Up until now, 85% of those using the system are retained as customers.
Cracking the UK
With PassportCard operational in Israel, Germany (in partnership with Allianz), and soon to launch in Canada, Haran now has eyes firmly fixed on cracking the UK market.
After conducting some market research Haran says that UK travellers are looking for better customer service and quicker fulfilment of claims when seeking out the right travel insurance. Cost comes lower down the list.
“That strengthens our belief that the market in the UK is not flat, and that there are significant segments for whom this concept could be relevant. We’ve managed to attract a lot of attention from local underwriters and insurance companies and we are very pleased with the progress so far,” he says.
“My target is to see some British customers travelling with our card, insured by a local insurer. I think there is a high likelihood that we will achieve that.”