Tune Ins unlocks insurance potential of robust travel market
Low-cost fares have changed the aviation landscape in Southeast Asia. With an expanding middle class flying more frequently to reach an increasing number of destinations, low-cost carriers hold about a 50 per cent share of the intra-regional travel market. This critical mass of consumers, who typically purchase travel insurance, will form a new base of insurance buyers and potentially revolutionise the region's insurance industry as e-commerce gains traction.
Low-cost fares have changed the aviation landscape in Southeast Asia. With an expanding middle class flying more frequently to reach an increasing number of destinations, low-cost carriers hold about a 50 per cent share of the intra-regional travel market. This critical mass of consumers, who typically purchase travel insurance, will form a new base of insurance buyers and potentially revolutionise the region's insurance industry as e-commerce gains traction.
Tune Ins is headed in this direction with its vision to be the leading digital insurance franchise in Asean by next year. As the exclusive insurer of AirAsia, which has been named the world's best low-cost airline since 2009, Tune Ins provided travel insurance to 8 million passengers last year, giving Tune Ins a strong baseline for cross-selling protection products such as home contents and vehicle insurance.
"We have an innovative model in the airline business," says Peter Miller, CEO of Tune Ins. "Our first-class database will allow us to offer our customers other insurance products and save on upfront investments, such as advertising, which can return to our customers in terms of rewards such as points towards free flights or discounted policies."
Tune Ins supports AirAsia across 16 countries in Asia-Pacific and leverages the airline's brisk sales to raise insurance awareness and promote protection products. It enjoys an 80 per cent contact rate with AirAsia customers, who use primary e-mail addresses on their bookings to ensure prompt delivery of e-tickets.
Providing a full suite of products through Tune Insurance Malaysia, the company serves as the insurance arm of the entire Tune Group in Malaysia. The Petronas group is a long-standing client among many in the oil and gas sector. Outside of Malaysia, a locally-licensed partner in each of the markets reinsures a share of the travel insurance business to Tune Ins' Labuan-registered subsidiaries.
With its highly replicable online business model, Tune Ins is able to bundle product offerings into exclusive deals available through partners such as Expedia and Tune Hotels. "We can adapt the model for every airline," Miller says. "Our partners are not just getting a commission for selling a third-party product, they are also able to share the value of what is created."
For instance, majority shareholders Tune Money and AirAsia have derived hefty earnings from the strong financial performance of Tune Ins since its listing on Bursa Malaysia in February last year.
Positioning for the expected tariff liberalisation across Asean, Tune Ins is keen on structuring mutually beneficial agreements, including equity arrangements, with prospective partners in Asean's emerging markets.
"We believe in the market fundamentals," Miller says. "Insurance is still growing at double digits in many markets in Asia, faster than most Western economies can dream of."
Through a strategic partnership with Malayan Insurance, Tune Ins started covering the international passengers of Philippine carrier Cebu Pacific Air in June last year. AirAsia's acquisition of Zest Air also expanded Tune Ins' Philippine market.
With the launch of its B2C platform in the fourth quarter of last year, Tune Ins has taken the full suite of its insurance products to the digital realm. "I am convinced that virtually in every market, people will buy online," Miller says. "Through the B2C platform, we will build on synergies with strategic partners to make a truly compelling retail offering."
www.tuneinsurance.com
