Key takeaways
- Flexibility has become a decisive factor in booking: For travelers, being able to cancel, modify, or shorten a trip without justification is no longer a "bonus" but a standard expectation.
- Insurance enables flexibility... and conversion: By combining flexibility and insurance (CFAR, MFAR, LFAR), travel companies are turning an operational constraint into a clear promise. The result: greater confidence, fewer abandonments, and better checkout performance.
- Well-structured flexibility creates value for businesses: integratingflexible insurance at the point of payment allows companiesto align customer experience, European compliance, and a sustainable business model.
The ability to cancel, modify, or shorten a trip without justification is no longer optional: for travelers, it has become a condition of booking. And insurance is no longer just a safety net; it has become the catalyst for this flexibility...and a conversion lever for all players in the travel industry.
What travelers say
The intention to purchase travel insurance has more than doubled in Europe since the pre-COVID period. According to the States of Mind Travel report by Allianz Partners, in five major European markets (Belgium, France, Germany, Italy, and the United Kingdom), the intention to purchase insurance for international travel has risen from 21% in 2019 to 55% in 2022, driven explicitly by a need for flexibility in the face of unforeseen events.
Cancellations and refunds remain a major irritant: the FinMont survey on the online purchasing process shows that 1 in 10 travelers has already encountered problems getting a refund when they had to cancel, and 67% of respondents admit that they do not read the policies before booking—a sign that the current rules are perceived as opaque and that a "flexibility + coverage" product has immediate perceived value.
In terms of regulation, the European Union has strengthened travelers' rights: the right to cash refunds (with the option to refuse vouchers) and regulated deadlines (14 days) for package tours. This pro-consumer legal framework heightens expectations for flexibility and pushes brands to offer clear and quick options in the event of cancellation.
Business translation of these trends
The demand for flexibility is neither anecdotal nor circumstantial. It is a standard expectation, fueled by three drivers:
- Memory of shocks (health crises, strikes, climatic hazards)
- Budget constraints and aversion to sunk costs
- Europeanregulatory framework that legitimizes the right to reimbursement
Actors who make this flexibility clear at the point of payment, with integrated insurance and services, convert better.
Why combine flexibility and insurance (and not one without the other)?
One-click cancellation policies—often up to the day before departure—without protection shift the risk to the company (loss of revenue and operational burden). Conversely, traditional cancellation insurance alone does not meet expectations for flexibility (postponing a date, shortening a stay). Combining the two allows for:
A clear promise to the customer
"I'm booking now, but I can change my mind without stress, and I'll get a refund if I cancel." The Allianz Partners study even highlights that the search for flexibility is a major driver of the increase in insurance purchase intent in Europe since 2022.
A sustainable business model for the company
The insurance pools the risk of cancellation or modification, finances the refund (cash, credit note, virtual card), and reduces disputes and chargebacks.
An experience in line with European expectations
By harmonizing reimbursement processes (deadlines, payment methods), the offer is aligned with the new spirit of European rules, beyond the strict scope of flat rates, as indicated in this article.
The three guarantees that transform the decision to book
- CFAR (Cancel For Any Reason): freedom to cancel
Cancel For Any Reason (CFAR) insurance addresses travelers' main concern: losing money if their plans change. With CFAR, customers can cancel without justification up to the day before arrival and choose their refund method (cash, credit, virtual card).
It is the safety net that responds toCSR concernsCSR the need for budgetary control. The rise of CFAR reflects European consumers'explicit appetite for solutions without constraints, as highlighted in post-COVID sector analyses and insurance observatories.
- MFAR (Modify For Any Reason): flexibility at the heart of booking
The Modify For Any Reason (MFAR) guarantee allows travelers to adjust their reservations without justification ( dates, identity of travelers according to conditions), without penalties or additional fees (under the conditions provided). This is a direct response to dissatisfaction with booking processes that are considered rigid (nearly half of Europeans have already abandoned an online booking because it was too complicated).
With MFAR, the company secures conversions by offering what travelers are looking for: the ability to book now and adjust their reservation later.
- LFAR (Leave For Any Reason): flexibility once you're there
The Leave For Any Reason (LFAR) guarantee covers another fundamental need: the freedom to cut a trip short if circumstances change. Whether due to bad weather, a personal setback, or simply a change of heart, travelers can leave early without justification and receive a refund for unused nights.
What companies gain by integrating it at the point of payment
- Increased conversion: flexibility reduces hesitation (fear of losing a deposit, unclear terms and conditions). Payment benchmarks show that a lack of transparency regarding policies and fees leads to abandonment. Offering a clear and concrete flex + insurance option at the time of payment reassures customers and reduces the number of lost sales .
- Fewer disputes and after-sales service: in the event of unforeseen circumstances, offering a structured refund process (cash, credit note, or virtual card) and deadlines that comply with European standards reduces complaints and chargebacks related to overly strict non-refundable offers.
- Additional revenue: insurance generates incremental margin without cannibalizing sales and encourages a higher average basket size ( customers a category or extras when they feel protected). Market analyses also show growing insurance penetration in Europe, with demand focused on "protection against cancellation/interruption."
How to frame the offer correctly?
To maximize conversion while building trust, it is essential to present a clear, readable offer that is consistent with customers expectations.
- Prior itize clarity over comprehensiveness: At the time of payment, three pieces of information must be immediately understandable: what is covered, until when, and how reimbursement works. The FinMont study shows that a policy that is difficult to read is a major obstacle to completing an order—it is better to avoid endless PDFs and opt for a concise presentation.
- Offer a default "cancel for any reason" option (explicit opt-in): This means giving the customer a choice while clearly highlighting the added value of the option. A simple comparison between "non-refundable vs. flex + insurance" is often sufficient. Since 67% of customers actually read the policies, it is up to the interface to educate them.
- Offer multi-channel refunds: Provide multiple refund methods while guaranteeing a maximum turnaround time of 14 days, in line with European practices and expectations. This reduces friction and aligns the customer promise with the spirit of the new EU rules .
- Avoid confusion between CFAR and covered reasons: Market research and insurance guides show that many customers cancellation for a covered reason (medical, weather, employment, etc.) with cancellation without reason (CFAR). Explicitly naming both options and explaining the difference between them reduces claims and improves satisfaction after claims.
What Neat offers
Neat creates insurance policies and services tailored to the specific needs of all players in the travel and tourism industry :
- CFAR/MFAR/LFAR configurable by segment (leisure, corporate, group) and by channel (direct vs . intermediary)
- Guarantee for a wide range of players: airlines, hotels and vacation clubs, travel agencies, tour operators, concierge services and seasonal rentals, etc.
- claims process: short forms, standardized evidence, regulated reimbursement period
- Lightweight integration (API/SDK) into the booking process (hotel engine, OTA, TO, transportation), with dynamic pricing based on the basket and cancellation window.
- Reporting: number of subscriptions, revenue generated, conversion, retention rate, number of claims, etc.
Results for our customers: extra peace of mind, more conversions at checkout, more revenue per booking, less operational friction.
Please do not hesitate to contact us for further information.
