EXCLUSIVE: “Everything But the Elephant” – Natalie Marchant in ‘The Fintech Magazine’

The meteoric rise of the digital nomad as a customer segment has exposed gaps in insurance and banking provision that imaginative startups have started to fill. Natalie Marchant explores the world of the remote worker, the risks and benefits

“The biggest thing for me is being able to travel and learn more about myself and the world,” says business consultant John Munn, explaining why he joined the 35-million-strong tribe of digital nomads.

Munn describes himself as a ‘time optimisation expert’ who – perhaps appropriately – helps entrepreneurs work less. He also runs an environmental business that helps clients offset their carbon emissions with his partner Eliana Vanekova. Together, the 29-year-olds have spent much of the past few years working remotely – most notably in Spain and Thailand, but they also used those as bases to explore further afield.

And they’re far from alone in escaping the traditional 9-5 work routine.

The number of digital nomads looks set to soar, with more than 50 countries around the world now offering specific visas to capitalise on the growing trend for a self-determined work routine. Indeed, a recent study showed that Google searches for ‘digital nomad visa’ went up by a staggering 1,135 per cent this year, prompted by the addition of Spain and Italy to the ever-growing nomad-friendly list.

Just as the booming digital nomad sector offers opportunities for local economies, particularly in parts of the world badly hit by lack of tourism during Covid, it also opens the door to new markets for digital platforms servicing their financial needs abroad – be it foreign exchange services, e-wallets or, for when problems arise, insurance.

While there are many borderless banking options already on the market, traditional insurance models can find it hard to meet their needs – which is where the opportunities lie for neobanks, insurtechs and the more agile legacy insurance providers.

Dutch neobank bunq is one of the latest companies seeking to capitalise on the remote working trend by partnering with insurtech Qover to build out its product offering for digital nomads. Its Easy Bank Pro XL plan enables users to activate travel insurance through the Activities tab of the bunq app, as part of its commitment to making borderless banking seamless and creating a portfolio of other services around the needs of its customers.

“Knowing what kind of activities you can do is really important. We knew we’d be riding mopeds in Thailand, but a lot of insurers exclude elephants”

John Munn, digital nomad and business consultant

Similarly, US-based WorldTrips Insurance Services earlier this year launched its Atlas Nomads policy designed for an era ‘where remote work is not just a possibility, but a lifestyle’, while France-based insurtech Qiti in 2023 launched its AI-driven health insurance app targeted at digital nomads and frequent travellers.

So what exactly are digital nomads?

Digital nomads are location-independent, or remote, workers who use technology to carry out their business wherever they choose to be in the world. They are similar to more traditional expats in that they both live and work in a country that’s not their own, but there are some notable differences in lifestyle and commitment.

Expats tend to move to another country for work or retirement, often on a semi-permanent basis, while digital nomads are far less likely to establish roots. Accordingly, expats are likely to build a life in their host country, and work on-site for a particular company or organisation, while digital nomads have tended to be freelance or business owners and have more of a ‘visitor’ mindset – giving them greater flexibility to travel as and when they see fit.

That said, digital nomads are increasingly also salaried employees who have permission to work remotely. In the US alone, the number of digital nomads with traditional jobs rose by nine per cent in 2022, from 10.2 million in 2021 to 11.1 million, according to consultancy MBO Partners. This was on the back of the number of digital nomads doubling in 2020 and increasing 42 per cent in 2021.

Digital nomads are generally assumed to be highly skilled and tech-savvy, with many working in fields such as IT, digital marketing and education services such as language teaching and tutoring – although people working in more ‘traditional’ professions such as law and accountancy are increasingly working remotely abroad, as well.

Long hours and working at odd times of the day from those ‘back in the office’ is a common challenge for digital nomads in very different time zones – even if having a break from the traditional 9-5 work routine is the key attraction in itself.

Then there can be language barriers and, sometimes as a consequence of these, loneliness. Some digital nomads get caught out by realising that they do eventually miss the comforts of home, and, even if they really enjoy living in a particular country – unless they have a good visa option – moving on to somewhere else is going to be inevitable at some point.

In addition, there can be practical hurdles to overcome, most notably technological ones. Wifi needs to be good to stay connected, while technical support and other assistance – not to mention electronics stores – can be few and far between in more remote locations.

If a laptop or mobile suddenly dies, for example, replacing it quickly can be a fraught experience, which is where good insurance for technology and income cover can prove invaluable – navigating your way out of problems abroad can be challenging, especially if you’re based in one of the more exotic locations high on nomads’ destination list, such as Indonesia or Costa Rica.

Borderless banking and financial services have greatly matured in recent years and leading the way have been online banking apps such as Wise (formerly TransferWise), Revolut and N24, whose benefits include multi-currency accounts, real-time exchange rates and competitive ATM withdrawal fees wherever you are in the world.

Incumbent banking giants such as JPMorgan Chase have also sought to target the borderless banking market with the launch of its online bank Chase, which offers fee-free debit cards for use abroad and also relies on real-time exchange rates. But while companies such as William Russell and Expat & Co have been providing insurance for expats for some years, insurance offerings for the bespoke needs of digital nomads remain comparatively few and far between.

So what are they looking for, and what should insurance providers seek to provide if they want to tap into this growing market?

Centuro Global is a company that helps businesses expand globally through its tech-driven platform, which supports businesses on global talent deployment by navigating visa regulations, tax requirements and other issues.

When it comes to remote workers selecting insurance, Centuro Global CEO Zain Ali advises: “Nomads should take a ‘Goldilocks’ approach to selecting insurance. If your coverage is too limited, you’ll just be at risk of falling through the cracks if an unexpected disaster strikes. But if your coverage is too broad, you’ll just be throwing money away – for instance, there’s no need to buy a package deal that features home insurance if home is wherever you lay your head.”

When Munn and Vanekova set off to be digital nomads, insurance was something they took very seriously. Using a popular UK price comparison site, the pair were recommended to take out backpackers insurance – digital nomads were less of a trend then – and they chose a one-year policy that covered the world, minus the US as they didn’t plan on travelling there.

However, they’re the first to stress how important it is to read the finer details of insurance policies. “All of them are slightly different, so we built a shortlist and then read the contracts specifically,” says Munn.

“Knowing what kind of activities you can do is really important. For example, when we were travelling, we knew we’d be riding mopeds in Thailand but a lot of insurers exclude elephants [which are commonly on a nomad’s to-do list].”

“There’s a difference between someone who takes a ‘workcation’ every now and again and a fully-fledged nomad, out on the road for months at a time. Each will require different forms of cover”

Zain Ali, CEO, Centuro Global

It’s not just elephants. Many adventure sports, such as surfing, are specifically excluded by insurers – and yet it’s precisely the type of thrill many nomads seek.

When it came to health and accident cover, Munn and Vanekova made sure they had repatriation and indemnity, but were also aware that they could pay for certain aspects of healthcare privately and at a considerably lower price than at home, should that be required. They were also covered for baggage, passport and cash loss, but steered clear of additional policies for mobile phones and technology that often be replaced far cheaper in Asia than in Europe.

Such a detailed approach to selecting insurance is advocated by Neville Mehra, co-founder of Genki, a German startup that offers a health insurance subscription service, supported by insurers Allianz, Barmenia, and DR-Walter. It currently has more than 20,000 digital nomads signed up in more than 170 countries.

“Digital nomads, by definition, typically spend time living in, travelling between and working in multiple locations – sometimes even in completely different parts of the world. And traditional health insurance isn’t designed to cover people who have that kind of lifestyle,” says Mehra.

“Most local health insurance and national health systems only cover people in their home country. Sometimes they offer international coverage, but it’s typically limited to short trips abroad and often comes with a lot of restrictions on the types of activities and the types of treatments that are covered.”

Founded by travellers for travellers, in 2021, Genki launched a worldwide travel health insurance subscription called Genki Explorer for people who want the ‘flexibility to change plans on a moment’s notice’. Two years later it added Genki Resident, a long-term international health insurance with complete health cover, including dental and mental health care, pregnancy and childbirth, physiotherapy, and alternative medicine.

“Travel health insurance is great for digital nomads who are travelling for a few months, and who also have local health insurance or access to the national health system in their home country,” says Mehra.

“But those digital nomads who plan to travel for a few years at a time, and those who do not maintain any other health insurance or access to the public healthcare system in their home country should instead opt for international health insurance, as it offers long-term coverage and may also cover preventative care, vision, dental and maternity/childbirth.”

“Traditional health insurance isn’t designed to cover people who have that kind of lifestyle “

Neville Mehra, co-founder, Genk

There is, of course, another very good reason for digital nomads to take out health

insurance for the duration of their intended stay: it is very often a key requirement if applying for a digital nomad visa. But there are other policies that can be invaluable for digital nomads that may be less obvious – for example, if their technology fails or they lose the ability to work for another reason – and which are generally not covered by traditional travel insurance policies.

As Centuro Global’s Ali advises: “Nomads almost always depend on their laptops to make a living, so technology insurance is a must. The life of many digital nomads is quite comfortable, particularly for those taking advantage of geographical arbitrage to earn US or UK salaries while living in the developing world. But one accident could leave you both unable to work and stranded a long way from home. That’s

why we’d strongly recommend nomads to think about getting income protection, especially those who are self-employed.”

A nomad’s choice of insurance also needs to reflect their personal mode of remote working.

“Digital nomadism is a spectrum,” says Ali. “There’s a difference between someone who takes a ‘workcation’ every now and again and a fully-fledged nomad, out on the road for months at a time. Each will require different forms of cover, depending on how long you’ll be away from home and how much country-hopping you plan to do.”

Insurance providers looking to attract digital nomads must also consider how their tech-savvy clients could best access their services should they need them.

For example, 24-hour emergency telehealth services such as those offered by Allianz Care can be invaluable if someone isn’t within easy reach of in-person medical services. Simplesurance lives up to its title by enabling users to sign up online for gadget insurance from wherever they are within two minutes. Claim-making processes need to be quick and easy to complete online, too, and not require an expensive phone call abroad during office hours.

The best policies are built around the traveller. SafetyWing, for example, offers continuous coverage for 30 days (15 for US residents) for every 90 days abroad and flights home in an emergency.

As for Munn and Vanekova, they are now back in the UK. The appeal of having the same home to go to and a job in an office with colleagues was extremely tempting for Vanekova.

“It has been very interesting and constantly changing, but we have been doing it for five years and I think I’m starting to lack stability,” she explains. “It’s been amazing, and we’ll still travel more than just a week’s holiday every year, but we’re looking to form a base somewhere.”

There’s a lot more of the world to explore and they might yet move on. Meanwhile, millions of 20- 30- and 40-somethings are looking to follow in their footsteps, fashioning a new, borderless, flexible approach to living and working that will continue to challenge banking and insurance providers

This article was published in The Fintech Magazine Issue 32, Page 20-21