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Travel Insurance - UK - February 2016

OVERVIEW
What you need to know
EXECUTIVE SUMMARY
The market
Muted growth in market value in 2015
Figure 1: Travel insurance gross written premium and claims incurred/loss ratio, 2011-15
Total claims costs have steadily decreased
Figure 2: Cost of travel insurance claims incurred, by type of claim, 2011-14
Key players
AXA returns to growth at the top of the market
Figure 3: Leading travel insurance underwriters, by GWP (UK business only), 2014
Post Office stands out from rivals with recent rebrand
Figure 4: Attitudes towards and usage of selected finance brands, November 2015
The consumer
84% had insurance cover for their last holiday abroad
Figure 5: Proportion of people who had any travel insurance cover for their last holiday abroad, by age, November 2015
Direct channel takes close second behind comparison sites
Figure 6: Travel insurance provider for last holiday abroad, November 2015
One in 10 holidaymakers arranged their insurance using a smartphone or tablet
Figure 7: Travel insurance arrangement method for last holiday abroad, November 2015
Two thirds arranged their insurance within a month of departure
Figure 8: Travel insurance arrangement timeframe for last holiday abroad, November 2015
Travel insurance suffers from an overriding sense of obligation
Figure 9: Attitudes towards travel insurance, November 2015
Protection against failure of travel companies is key for customers
Figure 10: Interest in different aspects of cover, November 2015
45% of people are interested in managing claims using their smartphone
Figure 11: Most useful mobile app features, November 2015
What we think
ISSUES AND INSIGHTS
Mobile apps with claims functionality could help build brand
The facts
The implications
Too many cheap policies come at the price of customer protection
The facts
The implications
Point-of-departure sales could serve the forgetful and the fearless
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Muted growth in market value in 2015
Claims volumes slide but costs are on the rise
Growth in the number of holidays is limited
MARKET SIZE AND FORECAST
Muted growth in market value in 2015
Figure 12: Travel insurance gross written premium and claims incurred/loss ratio, 2011-15
Average premiums grow and single trip insurance shows a slight upturn
Figure 13: Travel insurance volume, value and average premium, by cover type, 2011-14
Figure 14: Proportion of annual vs single-trip travel insurance policies, by GWP, 2011-14
Market value to increase by 4.5% by 2020 …
Figure 15: Forecast of value of gross written travel insurance premiums, 2010-20
Figure 16: Forecast of value of gross written travel insurance premiums, 2010-20
…and policy volume will slip further before recovering
Figure 17: Forecast of volume of travel insurance policies, 2010-20
Figure 18: Forecast of volume of travel insurance policies, 2010-20
Forecast methodology
CLAIMS PATTERNS
Total claims costs have steadily decreased
Figure 19: Cost of travel insurance claims incurred, by type of claim, 2011-14
Only baggage and money claims grew in number during 2014
Figure 20: Number of travel insurance claims incurred, by type of claim, 2011-14
Claims success rates show the majority of claims are paid
THE OVERSEAS AND DOMESTIC TRAVEL MARKET
Two thirds have holidayed in the UK in the past year
Figure 21: Holiday destinations visited in the past 12 months, November 2015
Growth in the number of holidays is limited
Figure 22: Estimated total holiday market, volume, value and average spend, 2010-20
Global migration is driving an increase in visits abroad
Figure 23: UK residents’ visits abroad, by purpose of visit, 2011-14
KEY PLAYERS – WHAT YOU NEED TO KNOW
AXA leaves rivals behind at the top of the market
Mobile presents a clear opportunity to differentiate
Saga and Staysure battle it out for dominance among older customers
Brand research reveals the strength of Post Office
UNDERWRITER SHARE
AXA returns to growth at the top of the market
Figure 24: Leading travel insurance underwriters, by GWP (UK business only), 2012-14
COMPETITIVE STRATEGIES
Making the most of mobile
ACE Group
ERV
Distribution shifts as insurers look beyond the aggregators
Columbus Direct
Staysure
Growing over-50s market attracts strategic investment
Talk to TIM
Swinton
ADVERTISING AND MARKETING ACTIVITY
Insurers scale back their use of direct mail
Figure 25: Recorded above-the-line, online display and direct mail advertising expenditure on UK travel and sports insurance, by media type, 2012/13-2014/15*
Staysure invests heavily to rival Saga for older customers
Figure 26: Top 8 advertisers of travel and sports insurance, by recorded above-the-line, online display and direct mail advertising, by media type, 2012/13-2014/15*
Search and social media are growing in importance
Nielsen Media Research coverage
BRAND RESEARCH
What you need to know
Brand map
Figure 27: Attitudes towards and usage of selected finance brands, November 2015
Key brand metrics
Figure 28: Key metrics for selected finance brands, November 2015
Brand attitudes: AXA and Aviva lead the way with reputation for quality
Figure 29: Attitudes, by brand, November 2015
Brand personality: Advertising has helped Direct Line invigorate its brand
Figure 30: Brand personality – Macro image, November 2015
Sainsbury’s and Tesco are struggling to get their finance message across
Figure 31: Brand personality – Micro image, November 2015
BRAND ANALYSIS
Retailer brands lack clarity when it comes to finance
Saga and Staysure brands are driven by standard of service
Longstanding insurers inspire confidence
The Thomas Cook brand is under pressure
Post Office stands out from rivals with recent rebrand
THE CONSUMER – WHAT YOU NEED TO KNOW
84% had insurance cover for their last holiday abroad
Direct channel is a close second behind the aggregators
One in 10 holidaymakers arranged their insurance using a smartphone or tablet
Two thirds arranged their insurance within a month of departure
Protection against failure of travel companies is key for customers
45% of people are interested in managing claims using their smartphone
TRAVEL INSURANCE COVER FOR LAST HOLIDAY ABROAD
84% had insurance cover for their last holiday abroad
Figure 32: Travel insurance cover for last holiday abroad, November 2015
Youngest travellers are least likely to arrange protection
Figure 33: Proportion of people who had any travel insurance cover for their last holiday abroad, by age, November 2015
TYPE OF TRAVEL INSURANCE PROVIDER FOR LAST HOLIDAY ABROAD
Direct channel takes close second behind comparison sites
Figure 34: Travel insurance provider for last holiday abroad, November 2015
Post Office has garnered a following among Millennials
Figure 35: Travel insurance provider for last holiday abroad, by generation, November 2015
METHOD OF ARRANGING POLICY
One in 10 holidaymakers arranged their insurance using a smartphone or tablet
Figure 36: Method of arranging insurance for last holiday abroad, November 2015
One in five over-55s arranged insurance by phone
Figure 37: Proportion of people who arranged the travel insurance for their last holiday by phone, by age, November 2015
TIMEFRAME FOR ARRANGING POLICY
Two thirds arranged their insurance within a month of departure
Figure 38: Travel insurance arrangement timeframe for last holiday abroad, November 2015
Millennials are most likely to leave insurance until the last minute
Figure 39: Travel insurance arrangement timeframe for last holiday abroad, by age, November 2015
ATTITUDES TOWARDS TRAVEL INSURANCE
Travel insurance suffers from an overriding sense of obligation
Struggle to see value in annual policies
Airport kiosks will need to convince people they offer value for money
Figure 40: Attitudes towards travel insurance, November 2015
MOST IMPORTANT FACTORS IN CHOOSING A POLICY AND PROVIDER
Price and level of cover strike an uneasy balance for customers
Figure 41: Most important factors in choosing a travel insurance policy and provider, November 2015
Quality factors gain importance as customers age
Figure 42: Most important factors in choosing a travel insurance policy and provider, by age, November 2015
INTEREST IN DIFFERENT ASPECTS OF COVER
Protection against failure of travel companies is key for customers
Figure 43: Interest in different aspects of cover, November 2015
Millennials more likely to lack interest in cover specifics
Figure 44: Interest in different aspects of cover, by generation, November 2015
MOST USEFUL MOBILE APP FEATURES
45% of people are interested in managing claims using their smartphone
Figure 45: Most useful mobile app features, November 2015
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 46: Forecast of value of gross written travel insurance premiums, 2015-20
Figure 47: Forecast of volume of travel insurance policies, 2015-20
Forecast methodology
Fan chart explanation

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