The UK travel insurance market is mature and highly competitive, with sales of standalone policies driven by demand for overseas travel. The past few years have been difficult for those selling foreign holidays, and this has had some negative impact on demand for travel insurance. However, the effects have not been as acute as they might have been, thanks to the growing availability and popularity of packaged current accounts. The latter have fuelled the take-up of annual travel insurance over the past decade or so. Moreover, the packaged account sector continues to see expansion, with the arrival of new providers and products offsetting the withdrawal of Santander in 2013.

The recent improvement in the economic situation also bodes well for the travel insurance sector, since it should lead to increasing numbers of people holidaying and visiting friends and relatives abroad, as well as more overseas business trips. Yet despite a more positive trading outlook, there remain key challenges for underwriters, not least rising cost pressures linked to medical expenses inflation.

Mintel’s report explores all these issues and trends in detail. By drawing on a range of information and trade sources, it examines the size and composition of the market and assesses its prospects for future growth. Mintel’s market analysis is complemented by the results of an independently commissioned consumer survey, which provides insight into product ownership, consumer buying habits and general attitudes towards having travel insurance when visiting foreign shores.

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. There are numerous policies available to UK residents, all of which fall into two main product categories:

• 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 a customer with 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 significant proportion of annual policies are sold as part of packaged current accounts.

The market can also be divided into three broad areas according to the type of business being written:

• the affinity/packaged scheme 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 single or annual travel policies sold via an intermediary in return for commission (this includes agents and operators, as well as brokers)

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

The International Passenger Survey (IPS) collects information about passengers entering and leaving the UK, and has been running continuously since 1961. The IPS conducts around 260,000 voluntary interviews each year, with the findings used to produce estimates of overseas travel and tourism. Interviews are carried out at all major airports and sea routes, at Eurostar terminals and on Eurotunnel shuttle trains.

The Association of British Insurers (ABI) is the trade association for Britain’s insurance industry. It represents around 300 insurance companies, which between them account for approximately 90% of the UK insurance market. The ABI's statistical and research service offers a unique source of information on all aspects of the UK insurance industry, including travel insurance.

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