In our latest discussion paper, we hear from #TBF18 sponsors TicketPlan about treading carefully when it comes to ticket protection and insurance.
The Opportunity
An added value service for your customers, an incremental revenue opportunity, a means of encouraging more advance bookings and a solution for customer “no shows”.
All reasons for considering a ticket protection offering – particularly a strongly visible and branded solution. Very much a symbol of security in a highly uncertain world.
Properly considered and correctly executed with a provider who has assessed the regulatory position within the territories within which you operate (and who can offer a robust, scalable and proven claims/refund facility) – and you have a winning proposition.
Financial Regulation
Consider the regulatory position carefully. Make sure that your chosen provider has the depth of knowledge to guide you correctly and to ensure that you are not falling foul of the appropriate regulations.
Each country is very different. In the UK there are 2 options. Either:
A non-regulated guarantee underpinned by a supporting and regulated insurance policy issued to the ticket seller or
Individual regulated insurance policies issued to each ticket insurance buyer.
In the US the first option is prohibited. A ticket seller offering regulated ticket insurance (this is the only acceptable option) would need to be licensed within each state in which tickets are being sold.
Similar licensing requirements apply to the facility providers and also to the insurers.
The downside to getting this wrong is steep – fines, penalties, mass compulsory refunds and potentially forced business closure.
Adhere carefully to any guidance and keep a record of the efforts that you have made to keep the proposition compliant.
Don’t regard regulations as a hurdle or an impediment. More as a series of sensible steps to ensure that you and your customers are protected. Regulators will generally take a pragmatic view if you can show that you have made reasonable efforts to do the job correctly.
Data Protection, Integration and API’s
As we know GDPR comes in to force in the UK in May 2018. If you are integrating with your chosen insurance provider make sure that GDPR has been considered. Do you really need to integrate? Are there other options? What can potential providers offer in terms of choice?
If you do integrate (pass data to) a ticket insurance/protection provider, have you obtained explicit consent for that data to be transferred and is all the information that is being transferred totally necessary in order to complete the transaction?
Is the data (contractually) safe in the hands of the recipient. Have you received appropriate and enforceable undertakings in order to ensure that this data cannot be mis-used?
What is the minimum information/detail that could fulfill the needs of the chosen insurance/protection provider? Can this data be anonymized?
Dynamic Pricing of Insurance
This is topical subject which is firmly on the UK Regulator’s radar – and it is particularly relevant if you are selling a regulated insurance policy (as per option 2 above).
What seems to worry the Regulator is the use of ‘atypical’ and consumer data rather than simply using risk data (such as the ticket/booking value) to set the premium – for example charging someone more for their insurance because you can see that the person shops at high end designer stores, rather than typical high street retailers!
The message is clear. Whether you are selling a regulated insurance policy or a non-regulated guarantee, that sale needs to be clear, fair and transparent.
Strength of the provider / strength of the insurer
How long has your current provider been in the market and are they appropriately licensed within the area(s) in which you operate?
Is it clear exactly who is insured – the ticket seller in the case of Option 1 (above) or the individual ticket buyers in the case of Option 2. Have you been provided with appropriate supporting documentation?
Are the underlying insurers easily identifiable and contactable and what is their credit rating with AM Best, Standard and Poor’s or a similar ratings agency?
Make sure that the insurers will be there ready and waiting in the years ahead if things go wrong!
The future
The future for ticket insurance and protection is bright. There are a number of alternative solutions.
Research them well and choose carefully. The need for a track record, consistency and sustainability cannot be over-stated.
Author: Graham Berg
Graham Berg, ACII Chartered Insurance Practitioner is CEO, The TicketPlan Group – the market leader in Booking Protection, Ticket Refund Protection and Cancellation Protection for theatre, concert, festival and event tickets. Questions? Contact info here.