Three Lessons Learned While Building A Travel Insurance Startup During Covid-19

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Elad Schaffer is Co-Founder & CEO of travel insurance startup Faye.

It’s early 2020, and my business partner and I are thriving. We’ve just launched our AI-powered travel assistant, had 30 companies as our early adopters and had attracted investor interest.

A week later, Covid-19 hit. Travel came to a halt. And we were back at square one.

Honestly, it was a good thing.

The pandemic urged us to rethink our initial product, which was, frankly, too much of a “nice to have” for travelers. In an ecosystem that’s so large and hard to crack, a traveler’s most significant investment is spent pre-trip on flights and accommodation. In-trip assistance — what we aimed to initially offer — was simply not top of mind for consumers.

Covid-19 reset everything — how we think about health and wellness, where we live and how we explore the world. We saw early on that protecting one’s trip investment and health became the top consideration for those still taking to the skies.

So, we set out to create tech-driven, person-first travel coverage and care that sets a new standard in how people are looked after when they’re on the road. We took our experience in travel data and assistance and merged it with insurance — a space often known for jargon-filled policies, slow and bureaucratic claims processes and lengthy wait times.

Here are the top three lessons I learned while building our travel insurance startup, Faye, amid a pandemic.

1. Where everyone sees a challenge, there’s often a big opportunity.

Insurtech founders told us not to enter insurance — that building an insurtech offering is a long, heavily regulated process that will take a ton of time to launch, let alone to sell. This feedback was disconcerting but made us realize that if the hill looked too big to climb, it likely scared off most, creating a barrier to entry.

If you’re told not to tackle something because, for example, it’s highly regulated, time-intensive or reliant on a significant amount of capital, remember that this means it’s difficult for everyone and that your competitors will face the same hurdles. And let’s be honest — it also means that the end result is that much sweeter. My suggestion: The next time you’re told “don’t do it,” consider it a good thing. It means many were too scared to build what you’re building.

In hindsight, I’m glad we didn’t listen. We went on to build an insurtech startup and, in less than a year, had the technology, investors, underwriting partners and licenses to launch.

2. When mindsets shift, opportunity awaits.

Many of the greatest companies were built off of downturns and crises. My point is that when an entire industry crashes and businesses plummet, you don’t know what the new normal will look like, but you can make smart assumptions. Travel insurance was traditionally thought of as a means to protect one’s trip investment (e.g., flights and accommodations) against an unwanted cancellation. Up until the pandemic, most travelers didn’t know that it can also protect against medical emergencies (like Covid-19) and much more. This became top of mind for travelers almost overnight.

Widespread consumer opinion had significantly shifted in our business category, and we needed to move quickly to take advantage of that. In our gut, we knew it was the right time to strike. The lesson learned: When the climate in your space shifts, jump into action, pivot quickly and put your development resources behind meeting the urgent needs of your target audience.

Sure, maybe the first iteration of your product won’t be perfect. Maybe you’ll even be a bit embarrassed by it. But it’s meeting a critical need, and that’s what you’re hoping to do.

3. Consider the “gateway drug” of what you’re offering.

With the risk of getting sick or quarantined abroad a reality amid a pandemic, globetrotters are seeking more ways to be looked after in-trip to achieve peace of mind. Our travel protection would get travelers in the door, as they intellectually understand they must be protected while away from home, but what was going to keep them coming back for more?

We had to create a product that’s much more than insurance — adding layers of companionship, intelligence and delightfulness to create a more engaging experience to keep them coming back.

When developing your product, your starting point should be asking yourself what the gateway drug of your offering is that can help redefine your space — to wake it up. Consider what will take your solution from a nice-to-have to a must-have. My personal suggestion is to invest heavily in technology and the customer experience, knowing it will pay off in the long run, with brand cheerleaders who understand you have their best interests at heart.

Don’t shut down; rebound.

Startups are a rollercoaster. We could have stagnated — or, worse, shut down — when Covid-19 hit. But we turned it into an opportunity to shake up a sleepy space, focus and find the capital and the advisors to support us in making our vision a reality. If the path of entrepreneurship were easy, everyone would be doing it.


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