Table of Contents
Introduction and Abbreviations
-
- The market responds to change
- Report contents
- Methodology
- Definitions
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Premier Insight
-
- The retailer distribution channel offers further opportunities
- Invest in technology infrastructure
- Connect with independent packaging
- Offer extensions to be noticed
- Advertise through consumer goods
- Promote Internet services more vigorously
Executive Summary
-
- GWP grows for fifth consecutive year
-
- Figure 1: The value of the travel insurance market, by GWP, 2000-2004
- Market share changes for most providers
- Compliance issues remain in 2005
- The number of independently packaged holidays continues to rise
-
- Figure 2: Number of holidays abroad by UK residents, inclusive and independent, 2000-2004
- The penetration of single-trip cover is almost double compared with annual cover
-
- Figure 3: Type of policy purchased, October 2004
- The travel insurance distribution pattern has changed significantly
- Consumer insights
Market Factors
-
- The psychology of travel insurance
- Enthusiasm for credit fuels spending
-
- Figure 4: GDP, PDI, consumer expenditure and savings ratio, at current prices, 1999-2009
- Consumers remain committed to holidays
-
- Figure 5: Headline confidence and consumer expectations regarding personal finances – index movements, January 2001-October 2004
- Rise in independent travel increases the overall number of trips abroad
-
- Figure 6: Number of trips abroad (all modes) by UK residents, 1999-2005
- The number of business trips has declined
- European destinations remain the most favoured
-
- Figure 7: Number of holidays abroad by UK residents, by region, 1999-2005
- Certain destinations are experiencing a surge in interest
-
- Figure 8: Selected countries experiencing steady growth in number of visits from UK residents, 2001-03
- Certain destinations re-emerge to give consumers more choice
-
- Figure 9: Arrivals in selected emerging destinations, 1995-2002
- Independently packaged holidays snowball
-
- Figure 10: Type of holiday taken and number of nights, October 2004
- ATOL could bond independent travel companies
-
- Figure 11: ATOL coverage, December 2004
- Low-cost carriers battle for market share
-
- Figure 12: Low-cost carriers, UK market share, December 2004
- Non-EU European destinations popular in peak times
-
- Figure 13: Holiday visits abroad, by region and quarter, 2003
- Changing family status should be a focus for insurers
- People are increasingly arranging their own holiday programmes
-
- Figure 14: Number of holidays abroad by UK residents – inclusive tours versus independent, 2000-05
- The impact of Internet services
- E111 replacement
-
- Figure 15: Representative air ambulance costs, December 2004
- European pet passports
- Regulation from 14 January 2005
- ABTA training
- Additional insurance to be offered by ABTA members
- The Asia-Pacific earthquake disaster
Market Size
-
- The value of the market increased by 5% in 2004
-
- Figure 16: UK market for travel insurance, by GWP, at current and constant 1999 prices, 1999-2004
- The perceived value for money of multi-trip policies makes the product type appealing
-
- Figure 17: Typical standard European family* policy premium prices, annual versus single rates, January 2005
- The number of holidays has risen faster than collected premiums
-
- Figure 18: The value of the travel insurance market, by GWP, at current and constant 1999 prices, compared with the number of overseas holidays, 1999-2004
- Appeal of retail business grows weaker for some
- Over 20 million people travelled abroad in the last 12 months
-
- Figure 19: Estimated number of people who took out travel insurance in the last 12 months, by type of policy, October 2004
- Industry average premium
Main Providers
-
- The top five players account for over half of total market share
-
- Figure 20: Estimated market share of the main travel insurance underwriters, by value, January 2005
- AXA leads the market
- The intermediary and underwriter relationship
- Accounts up for grabs in a competitive market
-
- Figure 21: Selected providers of travel insurance and their underwriters, by travel agents and tour operators, January 2005
- RBS Group gains a significant foothold in the travel market
-
- Figure 22: Selected providers of travel insurance and their underwriters, by banks, building societies, retailers and others, January 2005
- Independent travellers influence business split
-
- Figure 23: Travel insurance business split, by type of policy, January 2005
- Underwriters and the rise of independent packaging
- Company snapshots
- AIG
- Aviva (Norwich Union)
- AXA
- TPU
- Elvia (Mondial)
- Europ Assistance
- FirstAssist
- Fortis
- GE Financial Insurance
- Groupama
- RBS Group
- White Horse
Competition and Product Pricing
-
- There is a strong rationale for certain consumers to purchase annual cover
-
- Figure 24: Representative standard European and worldwide family policy premium rates, annual versus single premiums, by company, December 2004
- A new opportunity for providers
- Premium and packaged bank accounts
- Credit card travel insurance
- Additional premiums can be realised through extra cover options
- Gap year cover comes to the fore
Distribution and Promotion
-
- Retailers increase volume share by 2 percentage points
-
- Figure 25: Volume share of the personal travel insurance market, by main distribution channel, 2000-2004
- Are affinity partnerships the way forward?
- Annual policies are sold in the ‘off’ season
-
- Figure 26: Travel insurance, month purchased, by type of policy, October 2004
- Household insurers cross-sell cover
- Single-trip policies were more likely to be purchased for beach holidays
-
- Figure 27: Type of holiday taken, by type of policy, October 2004
- Trust and human contact often endear people to a brand
-
- Figure 28: Advertising expenditure, by top providers, November 2003-October 2004
- Printed advertising accounts for most expenditure
-
- Figure 29: Advertising expenditure, by top advertisers, November 2003-October 2004
- Advertising expenditure in 2005
- Internet business will increase
- New distribution channels emerge
- Roam in confidence
Consumer Financial Activity
-
- Consumers will be low-spirited but active going forward
- Bancassurance and the distribution of travel insurance
- Relationship with the main financial services providers
- Saving and investment activity will intensify
-
- Figure 30: Savings, investment, borrowing and debt repayment – consumers’ expected activity, June 2003-September 2004
- Those aged 23-39 will be most active
-
- Figure 31: Expected financial activity, by socio-demographic and income groups, September 2004 and average for the last 11 quarters
- Savings and pension providers have reason to be optimistic
-
- Figure 32: Leading financial activities planned in the next six months, September 2003-June 2004
- Mortgage demand will continue to weaken
-
- Figure 33: Intended mortgage and property purchase activity, June 2002-September 2004
- Barclays and Lloyds TSB underpin their position as main MFSPs
-
- Figure 34: Leading main financial services providers: Market shares, September 2003-September 2004
- Nationwide BS should see significant ISA business
-
- Figure 35: Saving, investment and lending market sizes, by expected customer demand and brand leaders (overall % intending to undertake activity in brackets), September 2004
- Customers of HSBC and RBS lead the way in terms of proposed activities
-
- Figure 36: Activity levels of main financial providers’ customer bases, September 2004
The Consumer
-
- ABs are more likely to purchase travel insurance
-
- Figure 37: Proportion of travellers covered for their last holiday, by gender, age, socio-economic group and marital status, October 2004
- Londoners least likely to purchase cover
-
- Figure 38: Proportion of travellers covered for their last holiday, by lifestage, working status, gross annual household income and TV region, October 2004
- Travellers are presented with a number of opportunities to arrange cover
-
- Figure 39: Proportion of travellers covered for their last holiday, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, October 2004
- Consumers are more likely to purchase cover between July and September
-
- Figure 40: Seasonal distribution of travel insurance, October 2004
- Some consumers would benefit from better product advice
-
- Figure 41: Seasonal distribution of travel insurance, by gender, age, socio-economic group and marital status, October 2004
- Advanced brochure sales
- Some 17% of respondents took an independent short break
-
- Figure 42: Illustration of type of holiday taken and number of nights, 2000-04
- Annual policies secure an ever increasing share of the market
-
- Figure 43: Percentage of travel insurance policy sales, by policy type, 1999-2005
- Those aged 55-64 are more likely to purchase an annual policy
-
- Figure 44: Type of policy purchased, by gender, age and socio-economic group, October 2004
- Prosperous Urbanites favour annual agreements
-
- Figure 45: Type of policy purchased, by gross annual household income and tenure, TV region and ACORN category, October 2004
- Internet users more likely to purchase annual cover
-
- Figure 46: Type of policy purchased, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, October 2004
Consumer Attitudes and Targeting Opportunities
-
- A fifth of travellers sourced cover from a travel agent as part of a package
-
- Figure 47: Source used to obtain last policy, October 2004
- Some consumers are unavoidably disengaged with financial matters
-
- Figure 48: Source used to obtain last policy, by gender, age, socio-economic group and marital status, October 2004
- Londoners are less likely to arrange their cover at the travel agent
-
- Figure 49: Source used to obtain last policy, by lifestage, working status, gross annual household income and TV region, October 2004
- Those watching five or more hours of TV per day are more likely to purchase from a travel agent
-
- Figure 50: Source used to obtain last policy, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, October 2004
- A surprisingly large proportion of single-trip policies are sold direct through insurers via the Internet
-
- Figure 51: Type of cover, by source used to obtain last policy, October 2004
- Just under a third of respondents said that it is more convenient to purchase travel insurance at the time of booking
-
- Figure 52: Agreement with travel insurance statements, October 2004
- Remote channels do not encourage older people to shop around
-
- Figure 53: Agreement with travel insurance statements, by gender, age, socio-economic group and marital status, October 2004
- Some employees have the tools and the time to obtain quotes
-
- Figure 54: Agreement with travel insurance statements, by lifestage, working status, gross annual household income and TV region, October 2004
- Some consumers do not realise that premiums vary considerably among providers
-
- Figure 55: Agreement with travel insurance statements, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, October 2004
- Consumers becoming more aware of existing price differentials
-
- Figure 56: Policy type, by agreement with travel insurance statements, October 2004
- Some consumers are eager users of non-traditional providers
-
- Figure 57: Source of cover, by agreement with travel insurance statements, October 2004
- The Internet is the most favoured holiday booking method
-
- Figure 58: Booking methods used during the past 12 months, April 2004
- The main target groups for providers
-
- Figure 59: Policy type analysis of travel insurance main target groups using CHAID, October 2004
- Target groups are fairly prosperous
-
- Figure 60: Attitudinal analysis of travel insurance main target groups using CHAID, October 2004
Industry Views
-
- Market size
- Market share
- Advertising expenditure
- Internet distribution
- Market pressures in 2005
The Future
-
- Independent services will benefit from increased exposure
- Retailers will use their brand image to sell more products
- Distribution share will continue to change
- Consolidation and major account changes will continue
- Can the annual policy share of the market grow even further?
Forecast I – Market Value
-
- Minimal real growth
-
- Figure 61: Forecast of the travel insurance market, 2004-2009
- The changing market structure
-
- Figure 62: Projected index growth rates, at current prices and constant prices, 2004-2009
- Factors incorporated in the forecast
Forecast II – Policy Type Populations
-
- Travel insurance population to remain static
-
- Figure 63: Forecast of the travel insurance population, 2004-2009
- Annual policy population to grow at expense of one-off policy
-
- Figure 64: Forecast of the policy types within the travel insurance population, 2004-2009
- Population composition reflected in market composition
-
- Figure 65: Breakdown of the travel insurance, by policy type, 2004-2009
Back to top