Table of Contents
Introduction and Abbreviations
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- Definitions
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Executive Summary
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- Holidays and visits abroad increase
- New challenges for the industry in 2004
- Annual policies establish foothold on the market
- Independent holidays reach all-time high
- Visits abroad rise in 2003
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- Figure 1: Number of trips abroad by UK residents, by type of trip, 2000-04
- Travel insurance penetration
- Gross written premiums increase to £600 million in 2003
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- Figure 2: The value of the travel insurance market, by GWP, at current and constant 1998 prices, compared to the number of overseas holidays, 1998-2003
- Europ Assistance enters top tier of providers
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- Figure 3: Illustration of estimated market share of the main travel insurance underwriters, by value, 2004
- Share of distribution changed in 2003
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- Figure 4: Volume share of the personal travel insurance market, by main distribution channel, 2000-03
- Annual policies reach new high
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- Figure 5: Illustration of distribution of travel insurance, by type of policy, November 2003
Market Factors
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- Regulations will be a major issue in 2004/05
- Consumer expenditure and personal disposable income set to rise over the next few years
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- Figure 6: GDP, PDI, savings and expenditure, at constant 1998 prices, 1998-2007
- Severe Acute Respiratory Syndrome (SARS)
- Terrorist events of 2003 may influence travel market in 2004
- Consumer confidence low in 2003
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- Figure 7: Headline consumer confidence, spending measure and consumer expectations relating to personal finances (forward-looking), January 2001-November 2003
- Total trips abroad rise in 2003
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- Figure 8: Number of trips abroad by UK residents, by type of trip, 2000-04
- Business trips increase
- The number of holidays continues to rise
- Cost and length of holiday versus cost of travel insurance
- Holidays to EU destinations reach 40 million in 2004
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- Figure 9: Number of visits abroad by UK residents (excluding business), by region, 2000-04
- Interest in certain long-haul destinations continues to rise
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- Figure 10: Number of visits abroad by UK residents (excluding busness), by length of stay, 1999-2003
- Middle East and South Africa becoming more popular
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- Figure 11: Selected regions experiencing steady growth in long stay (14 nights+) market, 1998-2002
- The majority of European trips are taken between April and September
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- Figure 12: Number of visits abroad (excluding business) and proportion of annual total, by region and quarter, 2002
- Self packaging comes of age
- Government issues warning over children holidaying in term time
- Independent travel sector drives market to 40 million holidays
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- Figure 13: Number of holidays abroad by UK residents – inclusive tours versus independent, 2000-04
Market Size
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- Market size increases to £600 million in 2003
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- Figure 14: UK market for travel insurance, by GWP, at current and constant 1998 prices, 1998-2003
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- Figure 15: Typical standard European family* policy premium prices, annual versus single rates, January 2004
- Demand for travel insurance does not increase in line with holidays
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- Figure 16: The value of the travel insurance market, by GWP, at current and constant 1998 prices, compared to the number of overseas holidays, 1998-2003
- FSA regulation may have knock-on effect for travel insurance
- ABTA travel agent training
- Industry consolidation forecast to continue in 2004
- Retail business may lose its appeal
- Annual policies rise with independence
- Travel policies sold in 2003
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- Figure 17: Estimated number of people who took out travel insurance in the last 12 months, by type of policy, November 2003
- Travel insurance premiums
The Main Providers
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- Market review
- Underwriters and the intermediary network
- Events in general insurance may impact travel
- Travel accounts – Fortis insurance wins Post Office
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- Figure 18: Selected providers of travel insurance and their underwriters, December 2003
- The travel underwriting business has changed over the last few years
- Competition trims down top tier market share
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- Figure 19: Estimated market share of the main travel insurance underwriters, by value, 2004
- Travel insurance split between single and annual policies
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- Figure 20: Travel insurance business split, by type of policy, January 2004
- Company snapshots
- AIG Europe
- Aviva Group (Norwich Union)
- AXA Insurance
- Churchill Insurance
- Elvia (Mondial)
- Europ Assistance
- FirstAssist
- Fortis Insurance Limited
- GE Financial Insurance
- White Horse Insurance
Competition and Product Pricing
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- Figure 21: Representative standard European or worldwide family* policy premium prices, annual versus single rates, by company, January 2004
- Convenience wins over price
- The price gap lives on in 2004
- Competition continues to change the market outlook
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Distribution and Promotion
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- Travel agents and tour operators continue to lose distribution share
- The future of travel agent sales
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- Figure 22: Volume share of the personal travel insurance market, by main distribution channel, 2000-03
- Direct sellers increase market share
- Free travel insurance rises
- Post Office market share increases
- FSA regulation
- Advertising expenditure continues to rise
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- Figure 23: Advertising expenditure, by top five advertisers in the travel insurance market, 2002 and 2003
- Press advertising is the largest channel for expenditure
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- Figure 24: Type of advertising expenditure, by top five advertisers in the travel insurance market, 2003
The Consumer
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- The number of trips
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- Figure 25: Proportion of travellers who took a holiday in the last 12 months, domestic versus abroad, 1999-2003
- Long-haul package holidays decline
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- Figure 26: Proportion of travellers who took a holiday abroad in the last 12 months, by type of holiday, 2000-03
- Affluent people with no children are most likely to take holidays abroad
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- Figure 27: Proportion of respondents who took a holiday abroad in the last year, by type of holiday, age, gender, socio-economic group and lifestage, November 2003
- Travel insurance penetration steady in 2003
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- Figure 28: Proportion of holidaymakers who took out travel insurance for their last trip abroad, November 2003
- Annual policies soar to new high
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- Figure 29: Distribution of travel insurance, by type of policy, November 2003
- Women purchase more single policies
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- Figure 30: Distribution of travel insurance according to type of policy, by gender, age and socio-economic group, November 2003
- Married consumers and those in the third age lifestage likely to buy annual policies
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- Figure 31: Distribution of travel insurance according to type of policy, by marital status, lifestage and Special Groups, November 2003
- Higher income households prefer annual insurance
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- Figure 32: Distribution of travel insurance according to type of policy, by working status and gross annual household income, November 2003
- Single-trip cover most popular in northern regions
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- Figure 33: Distribution of travel insurance according to type of policy, by TV region and ACORN category, November 2003
- New technology users increase demand for annual multi-trip policy products
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- Figure 34: Distribution of travel insurance according to type of policy, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, November 2003
- Single-trip policy sales peak July to September
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- Figure 35: Distribution of insurance purchase, by type of policy and quarter, November 2003
- Travel agent sales driven down by competition
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- Figure 36: Source used to obtain travel insurance, by type of policy, November 2003
- London based travellers and ABs prefer direct sellers
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- Figure 37: Main source used to obtain travel insurance, by socio-economic and demographic groups, November 2003
- Travellers increasingly prefer to shop around for cover
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- Figure 38: Level of agreement to various attitudinal statements, November 2003
- Profiling the travel insurance consumer base
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- Figure 39: Indexed profile of the three main consumer types, by socio-economic group, November 2003
- Analysis identifies link between research, booking and insurance
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- Figure 40: Consumers using brochures for ideas, information and purchase, by insurance habits, November 2003
- Internet holiday buyers are advocates of annual products
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- Figure 41: Consumers using the Internet for ideas, information and purchase, by insurance habits, November 2003
- Use of print media should alert consumers to the best deals
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- Figure 42: Consumers using print media for ideas, information and purchase, by insurance habits, November 2003
- Travel agents encourage the purchase of insurance
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- Figure 43: Consumers using travel agents for ideas, information and purchase, by insurance habits, November 2003
- A proportion of single-trip buyers could be sold annual products
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- Figure 44: Analysis of insurance owner groups, using CHAID, November 2003
- Holiday-taking pattern identifies opportunities for insurers
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- Figure 45: Ownership of travel insurance and type of cover, by number of holidays taken in the last year, November 2003
The Future
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- The industry will evolve in 2004 to meet new FSA regulations
- Menu driven selling could become popular
- Increasing popularity of independent holidays will make a difference
- Increasing travel insurance penetration in a saturated market
- Large organisations benefit from travel insurance business
- General insurance losses may influence the travel market
- Will the economy support travel?
- The Internet continues to offer new opportunities
Forecast
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- Figure 46: Forecast of the travel insurance market, 2003-07
- Figure 47: Forecast of the overseas holiday market, 2003-07
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