Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- Market size and forecast
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- Figure 1: Forecast for total value of travel insurance GWP, 2006-16
- Channels to market
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- Figure 2: Channels used to purchase travel insurance, 2007-11
- Market factors
- Overseas holiday numbers stabilised in 2011
- Travel firms continue to struggle in 2011
- The number of travel insurance claims increased in 2010, and so did the amount paid out
- Holidays remain in demand despite a challenging economy
- Companies, brands and innovation
- AXA was the biggest travel insurance underwriter in 2010
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- Figure 3: Top five travel insurance underwriters, by GWP, 2010
- Brand promotion
- Who’s innovating?
- The consumer
- Travel and holiday trends
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- Figure 4: Holiday trends, November 2011
- Travel insurance ownership
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- Figure 5: Travel insurance ownership, November 2011
- Sources of information
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- Figure 6: Sources of information, November 2011
- Purchasing behaviour
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- Figure 7: Purchasing trends, November 2011
- Attitudes towards travel insurance
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- Figure 8: Attitudes towards travel insurance, November 2011
- What we think
Issues in the Market
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- Has the economy made consumers more willing to travel abroad without travel insurance?
- Have consumers’ preferences changed when it comes to arranging travel cover?
- Is the EHIC providing competition to travel insurance and making consumer overlook cover?
- Can providers make policies more transparent and gain consumer trust?
- Are travellers downgrading from annual to single-trip policies due to the income squeeze?
Future Opportunities
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- A friendly travel insurance policy
- Making travel insurance cool and exciting
Internal Market Environment
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- Key points
- Overseas holidays stop declining in 2011
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- Figure 9: Domestic vs overseas holidays, 2004-11
- Travellers from the UK are most likely to visit Europe
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- Figure 10: Outbound holiday visits, by region visited, 2004-10
- Independent holidays remain more popular among travellers
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- Figure 11: Inclusive holidays vs independent holidays, by volume, 2004-10
- Collapse of numerous travel firms continues in 2011
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- Figure 12: ATOL tour operator failures/closures in the UK, 2011
- Number and cost of claims increase in 2010
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- Figure 13: Travel insurance claims incurred, by volume and value, 2004-10
- Complaints about travel insurance on the up…
- …and should act as a warning to customers to check policy details
- Over-65s facing big hikes in travel insurance premiums
Broader Market Environment
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- Key points
- Stuttering economic recovery is a challenge for the travel insurance industry
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- Figure 14: GDP quarterly percentage change, Q1 2004-Q3 2011
- Holidays remain a popular way to spend extra money
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- Figure 15: What people choose to spend any extra money on, December 2011
- Holidaymakers get less for their money due to weaker Sterling
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- Figure 16: Spot exchange rates, US Dollar and euro into Pounds Sterling, January 2008-November 2011
- UK’s aging population is a challenge and opportunity for insurers
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- Figure 17: Trends in the age structure of the UK population, 2006-16
- Growing number of ABs could help to increase travel insurance sales
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- Figure 18: Forecast adult population trends, by socio-economic group, 2006-16
Competitive Context
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- Key points
- EHIC makes some people overlook travel insurance when travelling in Europe
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- Figure 19: Agreement with the statement ‘I have a European Health Insurance Card so do not require travel insurance in Europe’.
SWOT Analysis
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- Figure 20: Travel insurance – SWOT analysis, 2012
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Who’s Innovating?
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- Key points
- Nationwide’s FlexAccount offers free travel insurance to over-65s
- M&S Money launches a bespoke travel insurance policy
- RIAS offering a ‘kids go free’ policy on travel insurance
- Women can now take out specialist cover through Bikini Travel Insurance
- Halifax reacts to travel disruptions with new cover
- True Traveller launches a flexible travel insurance policy
Market Size and Forecast
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- Key points
- GWP remained stable in 2010 and is expected to grow slightly in 2011
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- Figure 21: Travel insurance GWP, 2005-11
- Annual policies holding up the travel insurance market
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- Figure 22: Volume and value of single-trip and annual policies, 2005-11
- Market forecast
- GWP is expected to reach £945 million by 2016
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- Figure 23: Forecast for total value of travel insurance GWP, 2006-16
- Travel insurance policies are expected to grow at a slower rate than GWP
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- Figure 24: Forecast for total number of travel insurance policies written, 2006-16
- Annual travel insurance policies will drive the market…
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- Figure 25: Forecast for value of annual travel insurance GWP, 2006-16
- Figure 26: Forecast for annual travel insurance policies written, 2006-16
- …while single-trip cover sales will stabilise
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- Figure 27: Forecast for value of single-trip travel insurance GWP, 2006-16
- Figure 28: Forecast for single-trip travel insurance policies written, 2006-16
- Forecast methodology
Market Share
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- Key points
- AXA continues to be the main travel insurance underwriter
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- Figure 29: Top ten travel insurance underwriters, by GWP, 2008-10
- Partnership play a big part in the travel insurance market
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- Figure 30: Selected travel insurance brands and underwriters, February 2012
Companies and Products
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- AXA
- Aviva
- RBS Group
- Europ Assistance
- Chartis
- Munich Re
- Ageas/Fortis
Brand Communication and Promotion
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- Key points
- Adspend increases by 11% in the year to October 2011
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- Figure 31: Topline adspend for travel insurance, 2008/09-2010/11
- Saga remains the number-one advertiser of travel insurance
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- Figure 32: Top ten travel insurance advertisers, 2008/09-2010/11
- Direct mail accounts for more than 50% of travel insurance adspend
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- Figure 33: Travel insurance adspend, by media type, 2010/11
- Companies use a seasonal approach when promoting travel insurance
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- Figure 34: Monthly trends in travel insurance adspend, 2010
Channels to Market
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- Key points
- Over a third of consumers purchase cover directly from the insurance company
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- Figure 35: Channels used to purchase travel insurance, 2007-11
- Two fifths of consumers arrange their travel insurance online
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- Figure 36: Methods used to arrange travel insurance, 2007-11
Travel and Holiday Trends
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- Key points
- Internet users are more likely to holiday abroad than in the UK
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- Figure 37: Holiday trends, November 2011
- Consumers are most likely to go on one overseas holiday
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- Figure 38: Number of holidays taken abroad in the last year, November 2011
- Income and socio-economic standing has a big impact on type and number of holidays
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- Figure 39: Holiday trends, by socio-economic grouping and gross annual household income, November 2011
- Figure 40: Number of holidays taken abroad in the last year, by socio-economic grouping and gross annual household income, November 2011
- 25-34 year-olds and over-55s are most likely to take a holiday
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- Figure 41: Holiday trends, by age, November 2011
Travel Insurance Ownership
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- Key points
- The majority of consumers have travel insurance when going abroad
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- Figure 42: Travel insurance ownership, November 2011
- Some policy overlap exists in the travel insurance market
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- Figure 43: Travel insurance ownership, by travel insurance ownership, November 2011
- Single-trip and annual policies appeal to different income groups
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- Figure 44: Travel insurance ownership, by socio-economic group and gross annual household income, November 2011
- Over-55s prefer annual policies and cover through a current account
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- Figure 45: Travel insurance ownership, by gender and age, November 2011
- Travel insurance ownership is higher among package holiday travellers
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- Figure 46: Travel insurance ownership, by most popular holiday trends, November 2011
Sources of Information
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- Key points
- Price comparison websites the most popular source of information
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- Figure 47: Sources of information, November 2011
- The majority of consumers use one source of information
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- Figure 48: Repertoire of sources of information, November 2011
- Independent holidaymakers more likely to use comparison sites
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- Figure 49: Sources of information, by most popular holiday trends, November 2011
- Different sources are used for single-trip and annual travel insurance
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- Figure 50: Sources of information, by travel insurance ownership, November 2011
Purchasing Behaviour
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- Key points
- Almost half of consumers purchase cover directly from the insurer
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- Figure 51: Purchasing trends, November 2011
- Disparity between sources of information and purchasing methods
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- Figure 52: Purchasing trends, by sources of information, November 2011
- Two thirds of annual policies are purchased from the insurance company
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- Figure 53: Purchasing trends, by travel insurance ownership, November 2011
Attitudes Towards Travel Insurance
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- Key points
- The majority of people appreciate the need for travel cover but some might be buying the wrong policies
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- Figure 54: Attitudes towards travel insurance, November 2011
- Insurers need to gain consumer trust and simplify policies
- Older travellers are more risk averse than younger holidaymakers
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- Figure 55: Agreement with the statements ‘I tend just to go for the cheapest policy’ and ‘It is not wise to go abroad without travel insurance’, by age, November 2011
- Single-trip policy holders are more likely to go for the cheapest cover
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- Figure 56: Attitudes towards travel insurance, by travel insurance ownership, November 2011
Appendix – Market Size and Forecast
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- Figure 57: Forecast for total travel insurance GWP, 2006-16
- Figure 58: Forecast for travel insurance policies written, 2006-16
- Figure 59: Best and worst case forecast for total GWP of travel insurance policies written, 2011-16
- Figure 60: Best and worst case forecast for total number of travel insurance policies written, 2011-16
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- Figure 61: Best and worst case forecast for annual travel insurance GWP, 2011-16
- Figure 62: Best and worst case forecast for number of annual travel insurance policies written, 2011-16
- Figure 63: Best and worst case forecast for single-trip travel insurance GWP, 2011-16
- Figure 64: Best and worst case forecast for number of single-trip policies written, 2011-16
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Appendix – Travel and Holiday Trends
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- Figure 65: Most popular holiday trends, by demographics, November 2011
- Figure 66: Next most popular holiday trends, by demographics, November 2011
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- Figure 67: Other holiday trends, by demographics, November 2011
- Figure 68: Repertoire of holiday trends, by demographics, November 2011
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Appendix – Travel Insurance Ownership
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- Figure 69: Travel insurance ownership, by demographics, November 2011
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Appendix – Sources of Information
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- Figure 70: Most popular sources of information, by demographics, November 2011
- Figure 71: Next most popular sources of information, by demographics, November 2011
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- Figure 72: Repertoire of sources of information, by demographics, November 2011
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Appendix – Purchasing Behaviour
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- Figure 73: Purchasing trends, by demographics, November 2011
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Appendix – Attitudes Towards Travel Insurance
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- Figure 74: Agreement with the statements ‘I tend just to go for the cheapest policy’ and ‘I do not trust insurers to pay out on travel insurance’, by demographics, November 2011
- Figure 75: Agreement with the statements ‘It is not wise to go abroad without travel insurance’ and ‘Insurers make it too hard to compare policies’, by demographics, November 2011
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- Figure 76: Agreement with statements ‘I have an European Health Insurance Card so do not require travel insurance in Europe’, by demographics, November 2011
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