What's driving outsized attach rates in 2020? how a tech-led approach has helped sustain a 2-3x bump.

Amir Massoudi
Amir Massoudi

VP, Partner Services & Analytics

In March, our BrightWrite data analytics team examined the effect that the unfolding Coronavirus was having on attach rates for insurance across our global partner network. In the time since the outbreak, attach rates in certain hotspots have increased by 400-600% at their peak versus December 2019, a trend that has sustained through summer where attach rates remain higher in Italy (290% up), US (110%) and France (40%). 

The data shows that hyper-relevant insurance products within the point of sale are adding safety and certainty. As a tech company who manages and administers multiple links in the insurance value chain, across a broad range of industries for retailers like eBay, Wayfair and Tile, shipping platforms like ShipStation, online travel companies like Booking.com and Despegar and auto industry platforms like Automatrix, updating existing policies and creating new ones is simple and straightforward. Beset by legacy processes, traditional insurers usually take over a year to manufacture new products, at an average cost of US$0.5m to $1m.

Given our low cost to manufacture new protection products, at the outset of the pandemic our team quickly mobilized to develop coverage options that addressed specific challenges as the impact of the travel bans, lockdowns and economic uncertainty started to unfold.

Adding flexibility as a core response to COVID

For example, flight vouchers for canceled travel are issued by airlines and there’s no system to flow the voucher dates back to their agents (and therefore us). Realising the date changes could leave customers unprotected and at risk, we quickly added new functionality to the XCover platform that gave open-dated protection. 

Coverage for Carrier Collapses

Customers become the big losers when airlines like LatAm, Avianca, Virgin Australia, South African Airways and many others collapse. Knowing this, we built a first-of-its-kind airline insolvency product that fills the financial void for customers when the future of an airline becomes uncertain.

This means customers can book with the reassurance that XCover can reimburse their airfares instantly and automatically and they get home safely.

Lessening Financial Risk for Shippers and Merchants

Given the pain experienced by bricks and mortar retailers like JC Penney, Brooks Brothers, Hertz, J Crew, Neiman Marcus and others and the spike in online shopping, we’ve been able to add similar coverages for partners in Retail and Shipping. For shippers, the new normal of contactless deliveries and an explosion in online shopping heightened the risk of non-delivery.

Our partners, including global shipping software platforms like ShipStation, use XCover to offer protection to their global network of merchants, reducing their financial risk as the logistics supply chain adapts to delayed fulfillment timelines, increased volume of deliveries and changes to delivery locations.

XCover’s flexibility means that the protection can be tailored to cover amounts above the deductible (aka “excess”), or the deductible itself, or the gaps in carrier coverage (for instance, items over $500 plus phones, personal electronics, jewellery, art, perishables and more are usually not covered by traditional shipping insurers), or it can replace carrier insurance entirely or replace uninsured transit legs.