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How does the Travel Insurance Industry Work?

It’s not your imagination.  It really is confusing.  There can be all sorts of entities involved in a single travel insurance policy.  Here’s how it all fits together.

Insurance companies. There is a small group of insurance companies who regularly write travel medical insurance for groups in the US, with a somewhat larger list operating outside the US.   It’s remarkably different from the much more extensive travel insurance marketplace for individuals.

The insurance company is the risk-taker, the entity actually standing behind the promise to pay claims.  Sometimes it is hard to figure out who the actual insurance company is on some travel insurance programs, but that’s an important thing to establish.

Administrators.  Insurance companies are rarely the point of customer sales for group insurance.  Travel insurance for groups larger than ten or twenty people is generally sold to the public through travel insurance program administrators, and sometimes through insurance agents and brokers, and sometimes all of them in a row.  

Rasenna Consulting is a broker for group travel insurance.  Brokers work with insurance companies but represent the client, not the insurer.  We are also the administrators for our patented customizable group travel insurance product, Core Travel Insurance.

Travel Assistance companies.  Each insurance company works with one of several big international medical assistance companies.  Sometimes insurers own these assistance companies but mostly they contract with them.

Assistance companies typically have the most famous and recognizable names in the industry.  People think all the time that the assistance company is the insurer;  usually that's not the case.  But assistance companies can also be mysterious because they provide service to insurance programs under many white-label brands.

It can take some real archaeology to determine who the actual assistance provider is on your travel insurance program, but again, that’s an important thing to know so that you can match their capabilities to your group’s risk.

Assistance companies are the helper for both the traveler and the insurance company.  The traveler calls the assistance company in the case of emergency overseas, and can get medical assessments, arrangements for medical evacuations, guarantees of payments for hospitals, and a variety of other travel and payment services.  

The insurance company relies on the assistance company to manage these medical and personal emergencies and also to obtain their professional assessment on which to base claim decisions.

Claims service companies.  Claims aren’t always managed by the insurance company;  often insurers contract that service out to a Third-Party Administrator, or TPA.  In this case, third-party just means “not the insurance company”.  

These days travel claims services should be sophisticated.  We expect them to be multilingual, using thorough medical networks and cost containment in parts of the world where there may be very expensive medicine.  But many still are not.

Even more than benefits selection, the quality of the claims service is key to the success of your group travel medical program.  Factor this into any negotiation.

Hello, who’s there?  The flip side of solid claims management is crystal clear customer service.  Travelers as a rule get good contact information about their insurance, but they don’t always understand who they are calling.  It could be the assistance provider, maybe the agent, the administrator, or the TPA.  There are so many parties in the mix whose roles could be interchangeable.  It can make travel insurance seem crazy.  

It’s not crazy, but it is highly fractured.  One of the hallmarks of a good group travel insurance program is a well-chosen, clearly marked path for every entity involved, including the organization and its travelers.  

If you start with knowing who the industry players are—the insurer, the administrator, the assistance company, the claims service— you can make a good buying decision for a group travel insurance program.