Travel insurance isn’t a new concept – it’s been around for at least 1,000 years – and it seems unlikely to find new players entering the market, given that every insurance company and travel company offers its own version. And yet, five years ago an Israeli startup named PassportCard roared onto the local scene, and has since become Israel’s largest travel insurance company, with some 40% of the market.
There are a few strategies behind the company’s success, and they’re all related to its simplified, consumer-oriented attitude, explains CEO Yoel Amir to TheMarker.
PassportCard sends its customers abroad with a credit card. In the case of a medical incident, the customer calls the company’s service center, and the card is activated. The customer goes ahead and pays with the credit card, and thus the insurance company interacts directly with the medical service provider, without involving the customer in the middle.
Amir established his career at Scitex, a printing equipment company that was acquired by Hewlett-Packard in 2005.
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And yet, Alon Ketsef, PassportCard’s founder, called him in 2014 and invited him to run the newly founded company.
“Initially I didn’t really connect to the field of insurance,” admits Amir. But Ketsef explained that the company’s product would combine insurance and high-tech, and Amir agreed to sign on.
PassportCard isn’t just a regular insurance company, and that’s why it appealed to him - and to consumers, says Amir.
“If you were to go around the street and ask people what they think about when they think about insurance companies, the response wouldn’t be positive - justifiably. As consumers, we expect to receive something for our money when we buy a service or product, and the general impression that insurance companies leave is that this doesn’t really happen, and when the cost is low people often just give up.
“At our company it’s the other way around,” says Amir. “If you were to tell the heads of the claims departments at the various companies that starting today they pay for every claim without arguing, without forms, without anything, they’d say no. But that’s what we do.”
Amir says that the large majority of customers are honest.
“In 99% of the cases, customers, including Israelis, aren’t going around on their vacations abroad thinking about how to commit insurance fraud. The technology helps us pay quickly and easily,” he says.
For example, take the customer whose luggage didn’t show up. The airline knows that the suitcase will be there in two days. The customer photographs the document from the airline, and PassportCard loads $150 per person onto its credit card.
“That’s it,” says Amir. “You can begin your vacation without worries, and the suitcase will generally arrive as expected.”
“It’s a different type of thinking vis-a-vis the customer,” he says. “We want to be the change in the insurance sector in our little corner of the world.”
Amir acknowledges that his company’s insurance isn’t the cheapest, but says that Israeli consumers are changing their mindsets - they’re willing to pay more if it’s worth it.
“Customers see that it really works,” says Amir – no bureaucracy, the money arrives quickly. Plus, PassportCard is the only company with a service center open around the clock, seven days a week, he says.
Customers who filed claims are the company’s best advertisers, he adds.
“It’s enough to see what’s going on on Facebook – we’re a huge topic of conversation,” he says.
The company markets its insurance online and through insurance agents. Travel insurance customers have the option of buying extras - including insurance for search and rescue operations – in keeping with the requirements of the capital markets and insurance commissioner.
Search and rescue insurance isn’t just for trips to the Himalayas; the company receives missing person claims even for customers in places like Paris, says Amir.
When a missing person claim comes in, the company takes immediate action. To date, everyone has been found. “Some we found in a state we hadn’t hoped for, and there are some very sad stories,” he acknowledges. The company is examining the option of electronic searching techniques for backpackers, he says, though the search only begins once someone reports the person as missing.
Despite paying more claims than his competitors, PassportCard is very profitable, Amir says. Part of this is due to the technology - the company’s technological processes enable it to be much more efficient than its competitors.
“The other companies have heavy operations, while we work like a start-up. Everything is through apps,” he says. “The customer calls today, gets money on his card, pays and gets treated. After today he doesn’t need to call – he has an autonomous insurance platform. You go in, answer a few questions, and within a minute your card is automatically charged. It’s even more efficient and makes everything even faster.”