Table of Contents
Issues in the Market
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- Key issues
- Abbreviations
Market in Brief
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- The travel insurance market has proved very resilient
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- Figure 1: Travel insurance GWP, 2005-10
- Holiday cutbacks are the biggest threat
- The weak value of Sterling has also affected holidaymakers
- Packaged accounts and the EHIC are the main competitors
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- Figure 2: Ownership and use of benefits on fee-charging packaged accounts, March 2010
- AXA is the leading underwriter
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- Figure 3: Top ten travel insurance underwriters, by GWP, 2008 and 2009
- A diverse market in terms of advertising
- Bancassurers and aggregators continue to grow
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- Figure 4: Channels used to purchase travel insurance, 2007-10
- Most regard travel insurance as an essential purchase
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- Figure 5: Travel insurance ownership, November 2010
- Medical cover is the most important benefit
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- Figure 6: Attitudes towards travel insurance, November 2010
Future Opportunities
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- A year of disruption prompts more emphasis on cover
- Making more use of peer-to-peer marketing
Internal Market Environment
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- Key points
- Overseas holidays are back on the agenda
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- Figure 7: Domestic vs overseas holidays, 2004-10
- Europe is by far the most popular destination
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- Figure 8: Outbound holiday visits, by region visited, 2004-09
- The move towards independent holidays
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- Figure 9: Inclusive holidays vs independent holidays, by volume, 2004-09
- Several travel firms collapsed during the recession
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- Figure 10: ATOL tour operator failures/closures in the UK, 2010
- The year of strikes, volcanic ash and snow disruption
- Putting the focus on quality of cover over price
- Claim payments increased by just 6% in 2009
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- Figure 11: Travel insurance claims incurred, by volume and value, 2004-09
- Closer regulation for tied providers
Broader Market Environment
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- Key points
- The uncertain economic environment
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- Figure 12: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
- More consumers are struggling
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- Figure 13: Financial confidence, December 2009-December 2010
- Holidays are still highly sought after
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- Figure 14: What people choose to spend any extra money on, December 2010
- Weaker value of Sterling makes holidays more expensive
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- Figure 15: Spot exchange rates, US Dollar and euro into Pounds Sterling, January 2008-November 2010
- The UK’s ageing population also presents challenges
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- Figure 16: Trends in the age structure of the UK population, 2005-15
- Growth in the AB population is a positive sign
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- Figure 17: UK adult population, by socio-economic group, 2005-15
Competitive Context
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- Key points
- Most consumers do take out travel insurance
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- Figure 18: Travel insurance ownership, November 2010
- Packaged current accounts are a potential competitor
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- Figure 19: Ownership and use of benefits on fee-charging packaged accounts, March 2010
- The EHIC deters some holidaymakers
SWOT Analysis
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- Figure 20: Travel insurance – SWOT analysis, 2009
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Who’s Innovating?
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- Key points
- Travel disruption causes emergency policy extensions
- Aviva
- HSBC and First Direct
- Columbus Travel
- Insolvency of airlines prompts protection for independent travel
- Last-minute travel insurance policies
- Catering for third agers
- Online assessment of pre-existing medical conditions
- Embracing technology to improve customer service
- Europ Assistance
Market Size and Forecast
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- Key points
- GWP fell by just 3% in 2009
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- Figure 21: Travel insurance GWP, 2005-10
- The shift towards annual policies continues
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- Figure 22: Volume and value of single-trip and annual policies, 2005-10
- Forecast
- Single-trip policies expected to stabilise
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- Figure 23: Forecast of single-trip policies – GWP, 2005-15
- Slowdown in the growth of annual polices
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- Figure 24: Forecast of annual policies – GWP, 2005-15
- Total GWP will grow by 29% over the next five years
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- Figure 25: Forecast of travel insurance – GWP, 2005-15
- Forecast methodology
Market Share
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- Key points
- AXA was the leading underwriter in 2009
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- Figure 26: Top ten travel insurance underwriters, by GWP, 2008-09
- Large shifts in GWP in 2009
- A market based on partnerships
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- Figure 27: Selected travel insurance brands and underwriters, February 2010
Companies and Products
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- AXA
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- Figure 28: Key financials for AXA UK, 2008 and 2009
- Aviva
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- Figure 29: Key financials for Aviva UK, 2008 and 2009
- RBS Group
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- Figure 30: Key financials for RBS Group, 2008 and 2009
- Europ Assistance
- Munich Re/ERGO Group
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- Figure 31: Key financials for ERGO (the primary insurance business of Munich Re), 2008 and 2009
Brand Communication and Promotion
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- Key points
- Total sector adspend has fallen by a third in two years
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- Figure 32: Topline adspend for travel insurance, 2007/08-2009/10
- Saga had the highest adspend in 2009/10
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- Figure 33: Top ten travel insurance advertisers, 2007/08-2009/10
- A sector that uses a very targeted approach
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- Figure 34: Travel insurance adspend, by media type, 2009/10
- A sector with highly seasonal advertising
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- Figure 35: Monthly trends in travel insurance adspend, 2009
Channels to Market
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- Key points
- Banks and aggregators gain at the expense of travel agents
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- Figure 36: Channels used to purchase travel insurance, 2007-10
- Policies arranged online overtake the telephone
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- Figure 37: Methods used to arrange travel insurance, 2007-10
Travel and Holiday Trends
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- Key points
- Domestic holidays here to stay in 2010
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- Figure 38: Holidays taken in the last year, November 2010
- Affluent people more likely to take overseas holidays
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- Figure 39: Holidays taken in the last year, by household income and socio-economic group, November 2010
- UK popular for multiple holidays
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- Figure 40: Number of holidays taken in the last year, November 2010
- Multiple holidays abroad are the reserve of the wealthy
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- Figure 41: Number of holidays taken abroad in the last year, by age, presence of children, socio-economic group and household income, November 2010
Travel Insurance Ownership
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- Key points
- Most people do make sure they have cover
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- Figure 42: Travel insurance ownership, November 2010
- Older people are more risk-averse
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- Figure 43: Travel insurance ownership, by age, working status, presence of children and marital status, November 2010
- Low earners prefer single-trip policies
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- Figure 44: Travel insurance ownership, by socio-economic group and household income, November 2010
- Single-trip policies preferred for package holidays
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- Figure 45: Travel insurance ownership, by holidays taken in the last year, November 2010
- Insurance dismissed for domestic holidays
- Regular holidaymakers prefer annual policies
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- Figure 46: Travel insurance ownership, by number of holidays taken in the last year, November 2010
Travel Insurance Buying Behaviour
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- Key points
- Over a quarter of people use aggregators
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- Figure 47: Methods used to arrange cover, November 2010
- Buying behaviour dependent upon age
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- Figure 48: Methods used to arrange cover, by gender and age, November 2010
- Travel agents popular with low income groups
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- Figure 49: Travel insurance arranged through travel agents/tour operators, by household income and socio-economic group, November 2010
- Big holiday spenders more likely to buy direct
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- Figure 50: Methods used to arrange cover, by total amount spent on holidays abroad in the last year, November 2010
- Travel agents more popular for package holidays
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- Figure 51: Methods used to arrange cover, by travel insurance ownership, November 2010
Most Desirable Features of Travel Insurance
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- Key points
- Cover for medical expenses is the top priority
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- Figure 52: Most desirable features of travel insurance, November 2010
- Older travellers are more concerned about health cover
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- Figure 53: Most desirable features of travel insurance, by gender, age and marital status, November 2010
- High earners look for clarity
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- Figure 54: Most desirable features of travel insurance, by household income, November 2010
- Single-trip policyholders are more price sensitive
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- Figure 55: Most desirable features of travel insurance, by travel insurance ownership, November 2010
Attitudes Towards Travel Insurance
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- Key points
- Loyalty and mistrust equally prominent
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- Figure 56: Attitudes towards travel insurance, November 2010
- The EHIC is more of a deterrent to young people
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- Figure 57: Attitudes towards travel insurance, by age and household income, November 2010
- Issues of distrust
Claims Experience
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- Key points
- Claims experience fails to justify people’s distrust
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- Figure 58: Claims process satisfaction levels, November 2010
- Older people are harder to please
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- Figure 59: Claims process satisfaction levels, by gender, age, socio-economic group, household income and presence of children, November 2010
- Packaged current accounts may offer inferior cover
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- Figure 60: Methods used to arrange cover, by claims process satisfaction levels, November 2010
- Claims apathy in 12% of consumers…
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- Figure 61: Previous claims experiences, November 2010
- …and is highest amongst ABs
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- Figure 62: Previous claims experiences, by age, socio-economic group, household income and presence of children, November 2010
- Annual policyholders may be more profitable
- Transparency is key to trust
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- Figure 63: Previous claims experiences, by claims process satisfaction levels, November 2010
Targeting Opportunities
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- Key points
- Almost half of travellers are Cover-oriented
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- Figure 64: Travel insurance target groups, November 2010
- Cover-oriented
- Insurance profile
- Demographics
- Marketing insight
- Price-focused
- Insurance profile
- Demographics
- Marketing insight
- Demanding Sceptics
- Insurance profile
- Demographics
- Marketing insight
Appendix – Market Forecast
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- Figure 65: Forecast of single-trip policies – GWP, 2010-15
- Figure 66: Forecast of annual policies – GWP, 2010-15
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Appendix – Product Ownership
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- Figure 67: Travel insurance ownership, by demographics, November 2010
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Appendix – Travel Insurance Buying Behaviour
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- Figure 68: Most popular methods used to arrange cover, by demographics, November 2010
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Appendix – Desirable Features of Travel Insurance
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- Figure 69: Most popular desirable features of travel insurance, by demographics, November 2010
- Figure 70: Next most popular desirable features of travel insurance, by demographics, November 2010
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Appendix – Attitudes towards Travel Insurance
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- Figure 71: Most popular attitudes towards travel insurance, by demographics, November 2010
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Appendix – Claims Experience
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- Figure 72: Most popular claims process satisfaction levels, by demographics, November 2010
- Figure 73: Most popular previous claims experiences, by demographics, November 2010
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- Figure 74: Next most popular previous claims experiences, by demographics, November 2010
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Appendix – Targeting Opportunities
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- Figure 75: Target groups, by demographics, November 2010
- Figure 76: Travel insurance ownership, by target groups, November 2010
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- Figure 77: Methods used to arrange cover, by target groups, November 2010
- Figure 78: Most desirable features of travel insurance, by target groups, November 2010
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- Figure 79: Attitudes towards travel insurance, by target groups, November 2010
- Figure 80: Claims process satisfaction levels, by target groups, November 2010
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- Figure 81: Previous claims experiences, by target groups, November 2010
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