The Business-Insurance Challenge

 Travel insurance presents unique challenges in the general insurance market, and naturally, these challenges are reflected in the information systems. Unlike other types of insurance (such as home or auto), this product has specific characteristics: 

• Fast and Immediate Sales - Customers expect to purchase a policy within minutes, often right before their flight. There's no time for complex underwriting processes.
• Complex Dynamic Pricing - The premium is based on a variety of factors:
• Travel destination (different countries pose different risks)
• Trip duration (exact number of days)
• Insured's age (significantly impacts risk)
• Pre-existing medical conditions (health declarations)
• Special activities (adventure sports, skiing, diving), some of which may occur only during part of the trip or for some of the travelers.
• Various extensions (coverage for laptop, phone, trip cancellation)
• Multiple Sales Channels - The policy is sold through a wide range of channels:
• Directly on the insurance company's website
• Mobile applications
• Insurance agents
• Credit card companies
• Organizational collectives
• Travel agents
• Complex and Global Claims - Handling claims that occur worldwide:
• Medical treatment abroad (clinics, hospitals)
• Evacuation and medical repatriation
• Loss of luggage in various circumstances
• Flight cancellations and itinerary changes
• Reimbursement of medical expenses that have already been paid.
• Global Network of Service Providers - Managing a complex network of international service providers:
• Global medical assistance companies
• 24/7 service centers in different languages
• Hospitals and clinics with agreements worldwide
• Medical evacuation and repatriation companies
• Translators and local service providers
• Changing and Complex Regulations - Compliance with regulatory requirements of many countries:
• Local insurance supervision requirements
• Changing international regulations
• International health agreements
• Restrictions on medical treatment in different countries

The Technological-Operational Challenge

 The business complexity creates significant challenges for the information systems that need to support these processes: 

• High Availability and Fast Response Times - The system must operate 24/7 with very fast response times:
• Real-time premium calculation
• Immediate policy issuance
• Fast APIs for the various sales channels
• Ability to extend the policy even when the insured is already abroad
• Complex Integration - Connection to a wide range of external systems:
• Credit card company systems
• International assistance company systems
• Hospital systems abroad
• Various payment methods
• Medical databases
• Interfaces to global risk management systems
• Sensitive Medical Information Management - Handling protected medical information under strict regulations:
• High-level information security
• Compliance with GDPR, HIPAA, and local regulations
• Complex permissions management for different entities
• Support for Complex Business Models - The system needs to support different business models:
• Direct sales vs. sales through intermediaries
• Management of complex reinsurance agreements
• Different commission models for agents and distribution channels
• Unique agreements with collectives and organizations
• Product Flexibility - Ability to quickly define and change the product structure:
• Support for multiple packages and tracks
• Ability to easily add extensions and coverages
• Support for personal customizations for specific insureds
• Rapid adaptation to changing market demands (e.g., COVID-19 or war and emergency situations)
• Support for Complex Claims Management - A system that supports unique claims handling processes:
• Claims management in different currencies
• Claims handling in different languages
• Interfaces to global service providers
• Support for fast international payments
• Analytics and Risk Management - Advanced tools for data analysis and risk management:
• Geographic analysis of claims
• Identification of global medical trends
• Detection of international fraud
• Predictive models for global events (pandemics, natural disasters)

The Solution: A Flexible Hybrid Architecture

 To deal with the unique complexity of travel insurance, a system with a hybrid architecture is required, combining: 

• Stable Core of a Generic Product - A basic system that manages the core processes of general insurance.
• Modules Adapted for Travel Insurance - Dedicated components that handle the unique aspects of the field:
• Underwriting engine tailored to travel insurance characteristics
• Provider management module
• Claims handling module
• Flexible Integration Layer - Enabling fast and reliable connection to many business partners.
• User Interfaces Adapted to Different Sales Channels - Optimal user experience for each channel.
• Advanced Analytical Capabilities - For data analysis and continuous improvement of the product and pricing.

The complexity of the travel insurance industry perfectly illustrates the 'dual challenge' mentioned in the original article – the need to combine a stable generic product with a high degree of adaptability to the unique requirements of the field. Only a hybrid and modular architecture can provide an adequate response to the complex needs of insurance companies in this sector.