What you need to know

The UK market for travel insurance is mature and, in volume terms, large. There is high and stable demand for products, with around half of the adult population taking a trip abroad each year and the majority of these travelling with insurance. However, it is a challenging environment for underwriters, with rising claims costs squeezing margins and ongoing contractual and competitive pressures suppressing real premium growth.

Mintel’s research shows that although most people appreciate the need for insurance, there remains a core minority who continue to risk travelling abroad without cover. Mintel’s consumer survey identifies the key demographics of these two groups, and further segments those who bought cover specifically for their last trip abroad and those who already had annual cover in place. In addition, the survey reveals the popularity of channels used to help with policy selection (eg price comparison sites, specialist advisers) and the most influential factors determining choice (eg price, cover limits, ease of applying).

For the first time, the survey investigates how aware people are of certain common exclusions and stipulations. This includes the need for annual policyholders to inform their insurer of any change in health at renewal, the omission of supplier failure cover from many policies and the need to have the correct licence to ride a scooter or moped abroad. It investigates how prepared people are in the event of experiencing a medical emergency or other problem while abroad. For example, do they research what health provision and medical facilities are available at their destination before they leave, and do they take a digital or printed copy of their travel policy with them? Lastly, given the ongoing regulatory focus on this issue, Mintel’s research reveals the proportion of adults who have faced difficulties getting affordable insurance cover because of a medical condition or health issue.

Products covered in this Report

Travel insurance covers a range of risks associated with travel, notably cancellation, curtailment, medical expenses, loss or theft of personal possessions, personal liability and legal expenses. Many policies come with optional extras such as baggage and winter sports cover.

There are three main types:

  • A single-trip policy covers a single trip or holiday abroad, usually for the duration of between one and 31 days.

  • An annual multi-trip policy provides cover for multiple holidays taken during the course of the year for the price of one premium, although there may be a limit on the number of days spent per trip.

  • A long-term policy provides cover for those taking an extended trip abroad. Cover usually lasts for up to 18 months. This category includes insurance for backpackers and gap year students.

Specialist policies are also available, such as those designed for people with pre-existing medical conditions.

The market can also be divided into three broad areas according to the way policies are written and distributed:

  • the affinity/packaged sector, which refers to annual travel insurance schemes that are part of packaged current accounts or other financial products such as credit cards

  • the traditional intermediary retail sector, which refers to travel policies sold via an intermediary (eg travel agents, tour operators, retailers and brokers) in return for commission

  • the direct retail sector, which refers to policies sold by insurers directly to consumers, usually online or by telephone.

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