A deep dive into ANZ's travel insurance landscape - through the lens of payments

The Australia and New Zealand (ANZ) travel insurance market is one of the most advanced globally, defined by high consumer adoption, strong outbound travel behaviour, and advanced digital maturity. As travel and insurance purchases surge, payments have emerged as a strategic driver for insurers looking to increase conversion, reduce operational friction, and meet customer expectations for both pay-ins and payouts. 

Why payments matter more than ever

Australia continues to lead globally in travel insurance uptake, with 73% of Australians purchasing travel insurance before going overseas. This strong adoption is expected to grow even further, with the Australian travel insurance market forecasted to grow at 20.6% CAGR by 2030, driven by outbound travel recovery post-COVID and rising climate risk awareness. 

Many consumers now use aggregators or comparison sites to choose their policy. However, significant drop-offs occur when they transition from the aggregator site to the insurer's purchase process. Mastercard found that attrition from website visit to checkout initiation drops from 100% to 11%, and it further falls to 2% when the sale is completed. This sharp decline highlights the vital role payments play in helping convert sales for insurers.  

To reduce abandonment between website visits and purchases, insurers should simplify the checkout process. Lack of locally preferred payment methods, such as digital wallets in Australia, and debit and credit cards in New Zealand, as well as unexpected declines, can make customers abandon their purchase. And when they come from an aggregator, their details are usually pre-saved already, so one payment issue can lead them back to the aggregator, where alternative providers are readily available.

In a market with high intent and demand, optimising the payment experience is one of the most powerful strategies insurers can adopt to increase policy sales.

Payments at the core of a seamless journey  

The ANZ travel ecosystem has become highly digital, with travel insurance now integrated into the booking process for airlines, online travel agencies (OTAs), and travel agents. When customers purchase insurance while booking their flights or holidays, they expect real-time quotes, a seamless checkout experience, and efficient digital management of policies and claims.

Insurers are also increasingly using AI and agentic commerce to process policies and payments, as customers grow more comfortable with AI agents handling routine financial tasks, such as insurance payments and policy renewals. Some travel insurers in the region have also implemented AI-driven claims automation to resolve straightforward claims in just minutes. 

However, the success of these innovations hinges on reliable payment systems that can facilitate near-instant disbursements, prevent fraud, and enable transparent cross-border transactions. That's why payment systems must evolve at the same pace as digital insurance innovation.

Managing payouts in the ANZ region 

Travellers from ANZ face unique logistical risks due to their geographic location, long-haul travel patterns, and vulnerability to natural disasters, such as bushfires, floods and cyclones. These conditions drive higher rates of flight disruption claims, more expensive international medical repatriation, and significant payouts resulting from climate-related incidents. 

For insurers, this means that their payout solutions must be robust and customer-centric. To meet customer expectations, insurers need fast and flexible payout methods, reliable cross-border settlement capabilities, and the ability to manage large-scale catastrophic events. Payout delays can quickly damage consumer trust, making payments a critical part of the insurance promise.

Building lifetime value 

The ANZ travel insurance market is growing fast, and with that growth comes tougher competition. In this environment, payments play a real role in how customers choose and stay with an insurer. 

Insurers that modernise payments at every point in the customer lifecycle are the ones who stand out to:

• Increase conversion with a quick, simple discovery and purchase experience
• Reduce churn by making renewals and account updates effortless
• Build trust through fast, transparent claims disbursements
• Strengthen resilience with a payments infrastructure that can stay reliable even during peak times

Every interaction is shaped by how smooth the payment experience feels. Whether a customer is purchasing a policy, making changes, renewing, or making claims, any type of friction can be enough for them to look elsewhere. When payments work seamlessly, they keep customers engaged throughout the entire journey. 

Find out how : Getting payments right: Insurance | Worldpay