Sep 18, 2018

Who Buys More Travel Insurance: Millennials or Boomers?

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Have you ever gotten anxious when booking a trip online? If so, you’re not alone. Was it a health issue, high trip costs, or uncertainty that made you delay booking travel? Travel agents can ask these questions, but there’s not a precise way to read a customer’s mindset when travel is booked online.

Whether your customer is a Millennial or a Baby Boomer, chances are their answer is different. That’s why it’s so important to understand your customers, and it’s what we do best.

A smart travel insurance provider considers the customer first and then builds products to address their unique needs. That approach is critical to more satisfied customers and increasing revenues for our partners.  And it pays dividends.

More than a third of our customers who bought travel insurance for flights through our airline partners say they always purchase insurance, and over 70 percent of our customers surveyed are likely to re-purchase.1

So we posed the question, is a Millennial or Boomer more likely to buy travel insurance? Or in other words, what’s the value that each group wants from travel protection?

To answer this, we explored our proprietary research used to develop a highly sophisticated understanding of travelers and their concerns.  This data represents a segment of the more than 25 million customers around the world that Allianz Worldwide Partners insures annually.

The Smart Traveler with Trip Protection

U.S. consumers who purchase travel protection tend to be better educated, have a higher household income, and travel more for both business and pleasure than un-insured travelers. They typically do more research when planning their trips, checking at least four different information sources like online travel agencies or supplier websites. Insured customers book travel months in advance and usually take one or more international trips a year. They also book their trips as packages, adding hotel rooms or rental cars. Interestingly, women are more likely than men to purchase insurance in many travel segments.

But the most compelling factor is this: consumers who are more informed about the value of travel insurance are twice as likely to buy it. Therefore, much of our efforts are spent raising awareness of the category and better informing consumers how it can protect their investment, or their health while traveling abroad.

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Top Travel Concerns, Millennials to Boomers

While we recognize each generation has its unique subsets of consumer behaviors, Millennials tend to be fascinated with traveling and have a strong desire to explore destinations abroad. They’re generally more confident they’ll take the trip but are more anxious about what could go wrong during it.  Research shows a quarter of Millennials are motivated to buy travel protection primarily to insure against either luggage loss or potential health issues of themselves or a family member during their trip.2

Baby Boomers typically spend more time and money than other generations on travel, but they’re more concerned about unexpected reasons that might cause them to miss a trip, such as health issues. More than a third of Boomers buy insurance for trip cancellation, while a quarter of them purchase it in case they get sick or have a medical emergency abroad.

Generation X travelers tend to be more family focused and cost conscious. They’re most likely to bring their children to make memories and are concerned about family during the trip. Gen Xers often look for deals and want to avoid unexpected costs, so a trip cancellation benefit with cost reimbursement is often the most important.

Now back to our question. Who’s more likely to buy travel protection?

According to MMGY’s Portrait of American Travelers, more Millennials report buying travel insurance in the past 12 months than any other group. Over a third of Millennials plan to purchase it in the next 12 months, followed by 23 percent of Boomers and 21 percent of Gen Xers.3 So Millennials, one of the largest, most influential groups of travelers, are also the biggest proponents of travel insurance.

For international travel, consumers often have different and more compelling reasons to buy trip protection. Nearly a third of our customers visiting a foreign country buy insurance in case of illness or a medical emergency. High trip cost and reimbursement for covered trip cancellation are the next two most common reasons for trip protection, followed by the risk of lost luggage.

So what do we do with these customer insights?

Consumer Value Drives Demand

Focusing on customers’ unique needs enables us to develop more relevant travel protection benefits.  And when the right products are delivered to the right travelers, consumers see more value.  This value in turn drives more consumer demand while increasing partner revenue.

When customers are booking online, our Marketing Analytics and Optimization team uses advanced segmentation strategies to match the most relevant insurance products to the type of trips. For more on this, check out our article “Using Customer Data to Create the Ideal Offer.”

Contact us to learn about how we can increase your sales and revenue for travel insurance.

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Terms, conditions and exclusions apply.
Insurance benefits underwritten by BCS Insurance Company or Jefferson Insurance Company, depending on insured's state of residence. Plan(s) may not be available in all jurisdictions. Allianz Global Assistance and Allianz Travel Insurance are brands of AGA Service Company. AGA Service Company is the licensed producer and administrator of these plans and an affiliate of Jefferson Insurance Company. The insured shall not receive any special benefit or advantage due to the affiliation between AGA Service Company and Jefferson Insurance Company. Non-­Insurance benefits/products are provided and serviced by AGA Service Company. Consumer may be responsible for charges incurred from outside vendors for assistance or concierge services. Contact AGA Service Company at (800­) 284-­8300 or 9950 Mayland Drive, Richmond, VA 23233 or customerservice@allianzassistance.com.

Citations:

1. Allianz proprietary research, 2016
2. Allianz proprietary research, 2015
3. MMGY, Portrait of American Travelers, 2016

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