Global consumers are more likely to purchase flights, accommodations
and event tickets if they are offered ‘Cancel for Any Reason’ (CFAR)
protection, according to a recent report released by Momentive.ai and Cover Genius.
The report surveyed 10,300 global consumers from eight countries
including the US, UK, Australia, Japan, South Korea, Brazil, Germany and
France, to understand their experiences when requesting refunds and
their interest in adding CFAR Refund Protection.
The report found that 60% of consumers are highly likely to purchase
event tickets, flights and accommodations if they are offered CFAR
protection. This compares to a more limited refund protection option or
no protection at all. The convenience of CFAR protection leads to higher
customer satisfaction, resulting in a 17-point increase in Net Promoter
Airfare and accommodation
The global travel sector has seen higher demand and satisfaction with
CFAR protection when customers book flexible airfare and accommodation.
Specifically, 60% of travellers are highly likely to purchase an
airfare when given the option to purchase CFAR protection rather than
non-CFAR protection (60% vs 48%). Driven by convenience, they’d also pay
133% more for CFAR protection.
Travellers who have purchased CFAR protection for airfare are also
more satisfied with their experience, with an average NPS score 30
points higher than customers who purchased non-CFAR refund protection.
Live event ticketing
The report found that global ticketing consumers are more likely to
purchase tickets for live events if they are offered CFAR protection.
Specifically, 63% of respondents said they’d be highly likely to buy a
live event ticket if offered CFAR protection. This number drops to 54%
when they are offered a more limited refund protection option.
Respondents said they’d be willing to pay 123% more for CFAR protection
than non-CFAR protection, with convenience cited as the primary reason.
The study also found that customers who purchased CFAR protection
were considerably more satisfied with their experience, with an NPS
score 10 points higher than customers who purchased non-CFAR protection.
Opportunities for tech-savvy companies
Despite consumers' desire for CFAR protection, 5 out of 10
respondents were not offered ‘Refund Protection’ for their most recent
live event ticket and/or accommodation and/or airfare. This gap presents
an opportunity for digital companies across both industries to drive
customer satisfaction and add-on revenue by offering CFAR Refund
According to Angus McDonald, CEO and co-founder of Cover Genius,
modern-day customers are increasingly choosing all-encompassing and
hassle-free protection choices such as CFAR. With the help of insurtech,
digital businesses can fulfill this demand by integrating their
services seamlessly via an API for various platforms, including
ticketing, venues, resellers, airlines, OTAs, and hotels.
The report follows four groundbreaking reports that found customers
worldwide desire other types of embedded protection from property
players, airlines and travel agents, banks, and retailers.