Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- A stable market, with limited opportunity for real income growth
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- Figure 1: Forecast of gross written travel insurance premiums – Fan chart, 2013-23
- Brexit uncertainty dampening demand for travel
- Increase in average premiums reflects higher claims costs
- Regulator challenges industry to improve access for people with pre-existing conditions
- Companies and brands
- The largest suppliers are AXA and TIF Group
- Other key providers
- Withdrawal of Cigna creates new business opportunities for old rivals
- Product development and innovation ramps up
- The consumer
- Three fifths of UK adults have taken a trip abroad within the past two years
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- Figure 2: Proportion of adults who bought insurance for their last trip abroad, November 2018
- One in 10 travelled without insurance
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- Figure 3: Reasons for not having insurance, November 2018
- 5% left buying cover more than six months after booking their trip
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- Figure 4: When bought travel insurance, November 2018
- Price comparison sites are hugely influential
- Two in five buying travel insurance have a medical condition
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- Figure 5: Ease of getting cover for pre-existing medical condition, November 2018
- 69% have held their packaged account for six years or more
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- Figure 6: Length of time held packaged current account, November 2018
- 96% of people who have made recent use of their packaged travel cover “value” having this insurance
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- Figure 7: Agreement with statements about the travel cover included in the packaged account, November 2018
- 80% of people who’ve been abroad think it’s important to have airline failure cover
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- Figure 8: Importance of, and willingness to pay extra for, common policy add-ons, November 2018
- What we think
Issues and Insights
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- Cost isn’t the biggest factor for those who shun travel insurance
- The facts
- The implications
- Packaged account customers need a more overt nudge to declare medical conditions
- The facts
- The implications
The Market – What You Need to Know
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- A stable market, with limited opportunity for real income growth
- Demand for overseas travel softens as a result of Brexit uncertainty
- Average multi-trip premium continues to rise
- Regulator challenges industry to improve access for people with pre-existing conditions
Market Size and Forecast
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- Travel insurance market estimated to be worth £780 million
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- Figure 9: Total value of travel insurance policies sold, by gross written premiums, 2013-18
- Five-year forecast: market will struggle to achieve real growth
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- Figure 10: Forecast of gross written travel insurance premiums – Fan chart, 2013-23
- Figure 11: Forecast of gross written travel insurance premiums, 2018-23
- Forecast methodology
Market Segmentation
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- Single-trip sales start to see growth, while multi-trip sales remain stable
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- Figure 12: Segmentation of travel insurance market, by policy type – ABI members only, 2013-17
- Multi-trip sales still account for the majority of sales by ABI members
- Average multi-trip premium up 8% in 2017
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- Figure 13: Average travel insurance premium, by policy type, 2013-17
Market Drivers
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- Average travel claim has grown by 22% in five years…
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- Figure 14: Total volume and value of travel insurance claims incurred, 2013-17
- …driven by rising medical inflation
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- Figure 15: Volume and value of medical expenses claims incurred on travel insurance policies, 2013-17
- Medical expenses account for the largest proportion of claims costs
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- Figure 16: Proportional distribution of travel insurance claims costs, by type of claim, 2017
- A weaker Pound pushes up claims costs and the price of a holiday abroad
- Fewer people are expected to take a holiday in 2019 compared to 2018
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- Figure 17: Holidays taken in the past 12 months (and destination) and holidays planned to be taken in the next 12 months, November 2018
- Question mark over future of EHIC scheme post-Brexit
- Regulator acts to improve access to travel insurance for people with pre-existing conditions
Overseas Travel Trends
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- Number of overseas holidays rises again in 2018, but business trips fall
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- Figure 18: Number of overseas visits by UK residents, by purpose of visit, 2013-18
- Four in five trips abroad are to European destinations
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- Figure 19: Number of overseas visits by UK residents, by region of visit, 2013-18
- Three in five holidays are arranged independently
- Only 3% of holidays are for longer durations of 29+ nights
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- Figure 20: Number of holiday visits abroad by UK residents, by length of stay, 2013-17
- Those taking a short break are more likely to risk travelling without insurance
Companies and Brands – What You Need to Know
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- Largest suppliers
- Significant others
- One key player exits market
- Recent product innovation
Key Players
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- AXA and TIF Group are the largest travel underwriters in the UK…
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- Figure 21: Leading travel insurance underwriters and their partners, January 2019
- …followed by Direct Line Group and Aviva
- Significant others
- Smaller players and recent withdrawals
Competitive Strategies and Innovation
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- Market manoeuvrings
- Rebranding activity
- Acquisitions, disposals and market exits
- New distribution partnerships
- Product launches
- New products unveiled by Co-op, Admiral and Bought by Many
- Emerald Life launches “ground-breaking” travel insurance
- Generali UK launches bespoke business travel insurance solutions
- Technology-driven innovation
- New insurance start-ups use FCA Sandbox to test innovative solutions
- Revolut launches ‘£1 Pay-per-Day’ geolocation travel insurance
- Thomas Cook launches mobile first travel insurance brand
- AXA installs self-service kiosks at UK airports, providing on-demand cover
- Chubb launches flight delay insurance
Advertising and Marketing Activity
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- Only a handful of providers invest in above-the-line advertising to any significant degree…
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- Figure 22: Top 10 travel insurance advertisers (above-the-line, online display and direct mail advertising only), 2016-18
- ...with the greatest investment coming from Staysure
- Providers typically take a multichannel approach
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- Figure 23: Proportional distribution of travel insurance adspend (above-the-line, online display and direct mail only), by media type, 2016-18
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 24: Attitudes towards and usage of selected brands, January 2019
- Key brand metrics: Post Office leads the way in recommendation
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- Figure 25: Key metrics for selected brands, January 2019
- Brand attitudes: Traditional insurers benefit from a good reputation
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- Figure 26: Attitudes, by brand, January 2019
- Brand personality: Bupa stands out as exclusive
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- Figure 27: Brand personality – macro image, January 2019
- Micro image: Post Office and AA are regarded as reliable and reassuring
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- Figure 28: Brand personality – micro image, January 2019
The Consumer – What You Need to Know
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- Three fifths of UK adults have taken a trip abroad within the past two years
- One in 10 travelled without insurance
- 5% left buying cover more than six months after booking their trip
- Two fifths who bought travel insurance had a medical condition
- 69% have held their packaged account for six years or more
- 80% think it’s important to have airline failure cover
Insurance Cover for Recent Trip Abroad
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- Large target market for travel insurance
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- Figure 29: When last took a holiday or trip abroad, November 2018
- Two thirds bought a new policy for their last trip abroad
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- Figure 30: Proportion of adults who bought insurance for their last trip abroad, November 2018
- One in 10 travel without insurance…
- …typically due to reasons other than cost
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- Figure 31: Reasons for not having insurance, November 2018
Experience of Buying Cover
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- Only two in five bought insurance at the same time as booking their trip
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- Figure 32: When bought travel insurance, November 2018
- Around two thirds used a price comparison site
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- Figure 33: Proportion of adults who used a price comparison site to find/buy a travel policy, November 2018
- 40% had a pre-existing medical condition…
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- Figure 34: Presence of pre-existing medical condition at time of purchase, November 2018
- …of which, the majority found it easy to get cover
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- Figure 35: Ease of getting cover for pre-existing medical condition, November 2018
- Further improvements to access in the pipeline
Annual Policyholders – Attitudes and Experiences
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- 55% of people with annual policy have it included with their current account
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- Figure 36: Source of annual travel insurance policy, November 2018
- A significant minority say they don’t pay a fee for their packaged account
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- Figure 37: Proportion of packaged policyholders who pay a fee for their account, November 2018
- Packaged accounts help to instil loyalty
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- Figure 38: Length of time held packaged current account, November 2018
- 23% of packaged account holders have developed a medical condition since opening the account
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- Figure 39: Proportion of packaged account holders who have developed a medical condition since opening the account, November 2018
- Nearly all packaged account customers who’ve been abroad in the last two years value their travel cover…
- …but only 60% say they review their policy at least once a year
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- Figure 40: Agreement with statements about the travel cover included in packaged accounts, November 2018
Importance Given to Policy Add-ons
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- 80% believe airline/supplier cover is important but only 33% are willing to pay extra for it
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- Figure 41: Importance of, and willingness to pay extra for, common policy add-ons, November 2018
- The under-35s are most willing to pay extra for added cover
Appendix – Data Sources and Abbreviations
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- Abbreviations
- Key sources
- Consumer research methodology
Appendix – Market Size and Forecast
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- Total market sales forecast – best- and worst-case scenarios
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- Figure 42: Forecast travel insurance gross written premiums – best- and worst-case scenarios, 2018-23
- Forecast methodology
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