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Competitive advantage analysis – comparing travel insurance

Competitive advantage analysis – discerning differences in travel insurance policy wordings

When you take out travel insurance, how closely do you look at the policy wordings? These wordy documents full of legalese are ostensibly the same to the human eye. However, when conducting a competitor analysis, there can be surprising differences between them.

As useful as this could be when purchasing coverage, this type of competitor analytics is even more valuable to travel insurance providers looking to benchmark their offering against competitors. These nuances in policy wordings could be the difference in a customer properly understanding, and being satisfied with their insurance – rather than being uncertain or feeling they are entitled to quibble the small print – when in fact they are not.

Relative Insight Explore can rapidly analyze any type of text data, including lengthy documents like travel insurance policies that are labor intensive to scrutinize manually. To see just how different travel insurance policies can be, we compared policy wordings from AXA, Allianz and Berkshire Hathaway using our text analytics tool. It turns out there’s more to them than meets the eye.

Comparing travel insurance: AXA’s policy wording offers definitions and focuses on accommodation

As insurance policies have a reputation for being ambiguous, it was interesting to find that AXA’s policy tries to bring clarity for policyholders. It’s 2.8x more likely to use neutral common nouns, which mainly comprises of the word ‘means’.

This text analysis example demonstrates that AXA’s policy seeks to define areas of cover for policyholders more explicitly than other policies. This should improve customer experience and create a more straightforward process if customers do need to make a claim.

The other key difference between AXA’s policy wording versus competitors is a focus on accommodation. Its policy is 3.2x more likely to mention words relating to rooms and where people stay, and it uses the word ‘accommodation’ 7.5x more than Allianz and Berkshire Hathaway.

For those travelers most concerned about making claims around hotels or other accommodation, AXA’s focus could be a driving factor in them opting for one of the company’s policies.

Allianz text analysis example: pandemics and personalization

While AXA looked to clearly explain its policy, Allianz would rather create a connection with its policyholders. Comparing travel insurance policies, we found that Allianz was 1.7x more likely to use pronouns than AXA and Berkshire Hathaway. It was 1.7x more likely to use the possessive pronoun ‘your’ and 1.5x more likely to use 2nd person pronoun ‘you’.

Allianz also looks to replicate this more conversational style in how it refers to itself. It was 2.5x more likely to use the first person plural pronoun ‘we’, rather than referring to itself in the third person. This more accessible language could be an attempt to make its policy wording less daunting for customers to read, and therefore improve their understanding of how it works.

Analyzing Allianz's insurance policy using competitive advantage analysis

In terms of coverage, Allianz was the only insurer to specifically mention pandemics and epidemics. The German firm was infinitely more likely to use the phrases ‘pandemic’, ‘epidemic’ and ‘pandemic disease’ – meaning that these words didn’t appear in competitors’ policies.

Allianz talks about pandemics

Allianz appears ready to assuage prospective and existing customers still concerned about the impact of Covid-19 on their holidays.

Competitor analytics reveals Berkshire Hathaway’s more traditional wording

Both AXA and Allianz have tempered some of legalese associated with insurance policies. However, by comparing travel insurance, we found that Berkshire Hathaway’s policy wording is similar to what you’d expect from a traditional travel insurance policy.

Rather than use pronouns, Berkshire Hathaway refers to itself and its customers in the third person. This means ‘business’ words are 4x more likely to feature in its policy wording, with the word ‘company’ (as in calling itself “the company”) featuring 18.3x more often and ‘insured’ (referring to customers as “the insured”) 10.9x more likely to appear.

this policy is a legal contract between the insured and the company.

trip cancellation benefits: the company will reimburse you for forfeited, prepaid trip costs up to the maximum limit shown in the schedule.

Berkshire Hathaway's policy wording uses legalese

This increased formality also extends to its description of claims procedures. Berkshire Hathaway’s policy is 3.0x more likely to use words around the topics of truth and evidence, while it is 4.9x more likely to use the word ‘proof’. Rather than look to try to build a rapport or offer clarity like AXA and Allianz, Berkshire Hathway’s policy focuses on the transactional nature of travel insurance.

Comparing travel insurance: Using a text analytics tool to conduct a competitive advantage analysis

While travel insurance policies may seem similar on the surface, it’s clear from this example of text analysis that there are nuances which have an influence on how customers interact with the three providers.

Berkshire Hathaway policyholders can expect a transactional relationship and should be prepared to obtain evidence when making a claim. AXA customers should know what different terms in their policies mean, as well as being sure whether their accommodation is covered. Finally, people with Allianz travel insurance will feel like the company is communicating with them directly, as well as being certain where they stand if they encounter a pandemic or epidemic.

Whether these nuances accurately reflect each company’s priorities, or whether they’re a reflection of the legal teams who drafted the policies, this competitive advantage analysis highlights areas in which each firm could tailor their policies to drive a better customer experience and support those needing to make a claim.

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