Table of Contents
Issues in the Market
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- Key issues
- Abbreviations
Insights and Opportunities
Market in Brief
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- Premium income up…
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- Figure 1: Average travel insurance premium per insured overseas visit, 2001-06
- …but competition makes for a tough market
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- Figure 2: Source used to obtain last policy, 2000-07
- Regulation remains an issue
- A product with a wide customer base.
Fast Forward Trends
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- Trend 1: Trust in Me
- Definition
- Context
- Market touchpoints/implications
- Trend 2: Invasion of the Data Snatchers
- Definition
- Context
- Market touchpoints/implications
- Trend 3: Power to the People
- Definition
- Context
- Market touchpoints/implications
Internal Market Environment
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- Key points summary:
- Holiday market continues to boom…
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- Figure 3: Domestic and overseas holiday volume, 2000-06
- …with short breaks replacing the fortnight abroad
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- Figure 4: Short versus long holidays by volume, 2001-06
- Independent travel sidelines the travel agents
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- Figure 5: Holidays abroad taken in the last 12 months, October 2006
- Escaping the high street
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- Figure 6: Independent overseas holidays, 2001-06
- Holidaymakers becoming more adventurous…
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- Figure 7: Outbound holiday visits, by region visited, 2000-05
- …with activity holidays on the increase
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- Figure 8: Overseas activity holidays, 2000-06
- Snowsports market continues to grow
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- Figure 9: Snowsports holiday market, 2000/01-2006/07
- Overseas property boom playing a role
- FSA regulation – raising standards
- Travel agents face Treasury review in 2007…
- …but agents defend their sales practices
- Debate as to the Treasury’s recommendations
- The FSA bares its teeth
- Claims costs under control – but margins still tight
- Commoditisation
Broader Market Environment
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- Key points summary:
- More money – more holidays?
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- Figure 10: Trends in personal disposable income and consumer expenditure, 2001-11
- Ageing population changes insurance requirements
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- Figure 11: Trends in the age structure of the UK population, by gender, 2001-11
- Internet access hits saturation point…
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- Figure 12: Internet penetration, by gender, socio-economic group and age, 2001-06
- …but familiarity grows
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- Figure 13: Websites purchased from in the last three months October 2002-October 2006
Competitive Context
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- Key points summary:
- European Health Insurance Card
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- Figure 14: Proportion of travellers without insurance for their last overseas holiday, by gender, age and socio-economic group, October 2006
- Packaged accounts
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- Figure 15: UK current account holders, by account type, January 2006
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points summary:
- Most of the recent improvements behind the scenes
- Online processes cutting costs
- r u @ the arprt yt?
Trade Perspective
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- Scope for further growth of annual policies
- Aggregator sites to have a major impact
- Dealing with falling premiums
- Regulation
- An interesting future
Market Size and Forecast
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- Key points summary:
- Growth struggles to outpace inflation
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- Figure 16: Travel insurance market size, by gross written premiums, 1997-2007
- Real premiums falling…
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- Figure 17: The value of the travel insurance market, the number of overseas holidays and the average premium per overseas visit, 2001-07
- …but underwriting efficiencies counterbalance claims inflation
- Forecast
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- Figure 18: Forecast of the value of the travel insurance market, 2006-11
- Figure 19: Forecast of the number of overseas holidays and the average premium per overseas visit, 2006-11
- Some things to consider
- Factors used in the forecast
- Holidays abroad forecast
Segment Performance
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- Key points summary:
- Annual policies still gaining ground
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- Figure 20: Travel insurance segment performance, 1999-2007
- Annual policies in tune with modern holiday patterns
- Will the market see a 50/50 split?
Market Share
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- Key points summary:
- AXA boosts market share…
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- Figure 21: Estimated travel insurance market share, 2006
- …but rivals are competing hard
Companies and Products
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- Key points summary:
- A wide variety of partnerships and alliances
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- Figure 22: Selected providers of travel insurance and their underwriters (travel agents and tour operators), 2007
- Big five banks split their underwriting requirements
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- Figure 23: Selected providers of travel insurance and their underwriters (banks, building societies, retailers and others), 2007
- Smaller providers struggling with margins…
- …but still the new entrants come
- AXA
- RBS Group
- AIG
- Europ Assistance
- White Horse Insurance Ireland
Brand Communication and Promotion
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- Key points summary:
- Limited adspend for a mass-market product
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- Figure 24: Travel insurance adspend, 2001-06
- Direct mail reflects cross-selling opportunities
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- Figure 25: Key travel insurance marketing outlets, year to September 2006
- High spenders reflect route to market
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- Figure 26: Leading travel insurance advertisers, year to September 2006
Channels to Market
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- Key points summary:
- Travel agents’ market share declines
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- Figure 27: Source used to obtain last policy, 2000-07
- Booking patterns, not price, are the key trigger
- Packaged accounts are a growing threat…
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- Figure 28: Source used to obtain last policy, 2007
- …while aggregator sites could push down premiums
- Insure & Go makes its presence felt
Consumer Financial Activity
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- A quiet Christmas and New Year for providers
- Activity levels look set to drop sharply
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- Figure 29: Savings, investment, borrowing and debt repayment – consumers’ expected activity, June 2005-September 2006
- UK savings and spending climate
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- Figure 30: UK savings and spending climate – indexed, January 2001-October 2006
- Subdued picture across all sub-groups
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- Figure 31: Expected financial activity, by socio-demographic and income groups, September 2006 and average for the last 19 quarters
- Only ISA and life business will hold up
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- Figure 32: Leading financial activities planned in the next six months, September 2005-September 2006
- Property intentions may be hit by the rate rise
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- Figure 33: Intended mortgage and property purchase activity, September 2004-September 2006
- Identifying main financial services providers
- Bank of Scotland and Halifax customers will be the busiest
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- Figure 34: Activity levels of main financial services providers’ customer bases, September 2006
- NatWest and Barclays customers are looking to repay debt
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- Figure 35: Activity intentions and current household financial situation, by MFSP, September 2006
The Consumer – Holiday Patterns and Insurance Penetration
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- Key points summary:
- Nearly 23 million adults took an overseas holiday in the last year
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- Figure 36: Holidays abroad taken in the last 12 months, October 2006
- Relaxation and 5-star facilities are most desired features
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- Figure 37: Statements detailing factors that make holidays enjoyable, October 2006
- Younger people want hot weather
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- Figure 38: Statements detailing factors that make holidays enjoyable, by gender, age and socio-economic group, October 2006
- A stubborn core of people travel uninsured
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- Figure 39: Proportion of travellers with insurance for their last overseas holiday, October 2006
- Women and the over-55s are the most adamant about cover
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- Figure 40: Proportion of travellers with insurance for their last overseas holiday, by gender, age and socio-economic group, October 2006
- Implications and opportunities
- The pre-/no family group feels ‘immune’
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- Figure 41: Proportion of travellers with insurance for their last overseas holiday, by lifestage and Mintel’s Special Groups, October 2006
- Implications and opportunities
- Broadsheet readers are not so sensible
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- Figure 42: Proportion of travellers with insurance for their last overseas holiday, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2006
- Implications and opportunities
The Consumer – Seasonality and the Rise of the Annual Policy
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- Key points summary:
- ‘Free’ covers changes the seasonal pattern somewhat
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- Figure 43: Seasonal distribution of travel insurance sales, October 2006
- Younger holidaymakers ‘arrange and go’
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- Figure 44: Seasonal distribution of travel insurance sales, by gender, age and socio-economic group, October 2006
- Annual policy purchase is spread throughout the year
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- Figure 45: Seasonal distribution of travel insurance sales, by type of insurance policy, October 2006
- Rise of the annual policy continues apace
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- Figure 46: Proportion of coverage when going abroad, by type of insurance policy, 1999-2007
- 45-64s are the keenest proponents of annual policies
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- Figure 47: Type of policy purchased, by gender, age and socio-economic group, October 2006
- Implications and opportunities
- Those residing in the south favour annual policies
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- Figure 48: Type of policy purchased, by TV region, October 2006
- Implications and opportunities
- ABC1 third age group members are canny consumers
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- Figure 49: Type of policy purchased, by lifestage and Mintel’s Special Groups, October 2006
- Implications and opportunities
- Greenbee will have success in marketing to Waitrose customers
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- Figure 50: Type of policy purchased, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2006
- Implications and opportunities
The Consumer – Distribution and Consumer Buying Behaviour
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- Key points summary:
- Insurance companies continue to gain distribution share
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- Figure 51: Source used to obtain last policy, October 2006
- Historical data tracks the decline of agents’ role in travel insurance
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- Figure 52: Source used to obtain last policy, 2000-07
- 35-44s lead the way with online purchasing
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- Figure 53: Source used to obtain last policy, by gender, age and socio-economic group, October 2006
- Implications and opportunities
- Travel agent is still king in Scotland and the North West
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- Figure 54: Source used to obtain last policy, by TV region, October 2006
- Implications and opportunities
- ABC1 family Special Group endorses online purchasing
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- Figure 55: Source used to obtain last policy, by lifestage and Mintel’s Special Groups, October 2006
- Tabloid newspaper readers and Iceland shoppers go to The Post Office
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- Figure 56: Source used to obtain last policy, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2006
- Implications and opportunities
- The growth of Internet purchasing
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- Figure 57: Proportion of travellers using the Internet to arrange their insurance, 2003-06
- The Post Office has secured a sizeable part of the single-trip sector
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- Figure 58: Source used to obtain last policy, by type of policy, October 2006
- Ensure there is requisite medical cover and shop around
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- Figure 59: Attitudes towards arranging and shopping around for travel insurance, October 2006
- Implications and opportunities
- Older people worry about medical cover
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- Figure 60: Attitudes towards arranging and shopping around for travel insurance, by gender, age and socio-economic group, October 2006
- Implications and opportunities
- Annual policyholders are keen advocates of cover
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- Figure 61: Attitudes towards arranging and shopping around for travel insurance, by type of policy, October 2006
- Travel agent purchasers look for convenience and not savings
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- Figure 62: Attitudes towards arranging and shopping around for travel insurance, by source of purchase, October 2006
- Implications and opportunities
- Travel insurance clusters
- ‘Value seekers’ should generate business
- Convenience seekers (11% of respondents)
- Uninterested (49% of respondents)
- For practical purposes (15% of respondents)
- Value seekers (13% of respondents)
- True believers (13% of respondents)
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- Figure 63: Cluster groups in relation to attitudinal statements about travel insurance, by gender, age and socio-economic group, October 2006
- CHAID analysis identifies the key targets
- What is CHAID analysis?
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- Figure 64: CHAID analysis on type of travel insurance purchased, October 2006
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