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
- The market is declining…
- …and tough conditions are expected to continue
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- Figure 1: Forecast of gross written travel insurance premiums – fan chart, 2012-22
- Annual policies accounted for four fifths of the market in 2016
- Visits to Europe make up 80% of UK travel
- Medical inflation continues to threaten margins
- Regulatory developments
- Companies and brands
- Travel insurance specialists had the highest usage
- Revolut introduces geolocation travel insurance
- Total above-the-line adspend fell by 13% in 2016/17
- The consumer
- Over a fifth of consumers hold annual travel insurance as part of a current account package
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- Figure 2: Ownership of annual travel insurance, by policy type and regional coverage, November 2017
- Single-trip policies were the most popular for recent holidays
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- Figure 3: Travel insurance arrangements for last holiday abroad, November 2017
- PCWs were used by the majority of people who bought standalone policies
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- Figure 4: Usage of price comparison websites during buying process, November 2017
- Cover for illness/injury was the most popular reason for buying
- 45% of people bought travel insurance to protect their belongings
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- Figure 5: Reasons for arranging travel insurance, November 2017
- Most consumers are willing to share more information to get the best deal
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- Figure 6: Willingness to share information with insurance companies, November 2017
- Desire for simpler legal terminology
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- Figure 7: Desire for improvements when arranging travel insurance, November 2017
- Price is the most important factor
- UK-based customer services are important
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- Figure 8: Most important factors when arranging travel insurance, November 2017
- What we think
Issues and Insights
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- Helping consumers to compare more than just price
- The facts
- The implications
- The weak Pound is pressurising insurers
- The facts
- The implications
- Accessing cover
- The facts
- The implications
The Market – What You Need to Know
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- The market is declining
- Annual policies accounted for four fifths of the market in 2016
- Annual policies became more expensive than single policies in 2016
- Holiday and social visits increased but business visits shrank
- Visits to Europe made up 80% of UK travel
- Medical inflation continues to threaten margins
Market Size and Forecast
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- The market was worth an estimated £653 million in 2017
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- Figure 9: Estimated value of travel insurance policies sold, by gross written premiums, 2012-17
- Forecast
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- Figure 10: Forecast of gross written travel insurance premiums – fan chart, 2012-22
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- Figure 11: Forecast of gross written travel insurance premiums, 2017-22
- Forecast methodology
Market Segmentation
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- Annual policies accounted for four fifths of the market in 2016
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- Figure 12: Segmentation of travel insurance market, by policy type – ABI members only, 2012-16
- Annual policies became more expensive than single policies in 2016
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- Figure 13: Average travel insurance premium, by policy type, 2012-16
Overseas Travel Trends
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- Holiday and social visits increased but business visits shrank
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- Figure 14: Number of overseas visits by UK residents, by purpose of visit, 2008-17
- Visits to Europe made up 80% of UK travel
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- Figure 15: Number of overseas visits by UK residents, by region of visit, 2012-17
- 4-13 night stays continued to be most popular
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- Figure 16: Number of visits abroad by UK residents (holiday only), by length of stay, 2012-16
Claims Costs
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- Claims volume fell but claims value rose in 2016
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- Figure 17: Total volume and value of travel insurance claims incurred, 2012-16
- Medical inflation continues to threaten margins
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- Figure 18: Volume and value of medical expenses claims incurred on travel insurance policies, 2012-16
- Medical expenses accounted for the majority of claims costs
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- Figure 19: Proportional distribution of travel insurance claim costs, by type of claim, 2016
Market Drivers
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- Exchange rates increased the price of providing insurance
- Profit margins are being squeezed
- The ABTA is cracking down on sickness scams
- Monarch Airlines collapses
- Saga hit by airline failure
- Turbulence for Ryanair
Regulatory and Legislative Changes
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- FCA calls for input
- FOS upheld 19% of complains in 2016/17
Companies and Brands – What You Need to Know
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- Travel insurance specialists had the highest usage
- Revolut introduces geolocation travel insurance
- Total above-the-line adspend fell by 13% in 2016/7
- Television and direct mail were the main channels of advertising
Market Share
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- Travel insurance specialists were the most popular
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- Figure 20: Share of providers for travel insurance by type, November 2017
- 49% of consumers switched provider in the last two years
- Current account providers play a significant role
- The ageing population
Competitive Strategies
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- Aviva offers free European annual multi-trip policies
- Zurich bought and sold
- Thompson becomes TUI
- TIF Group launches Travel Insurance Explained
- Avanti bought by Staysure
- Revolut introduces geolocation travel insurance
- TIF Group launched Postcard Travel Insurance
- Staysure introduces ‘end supplier failure’ bolt-on
- New insurance app aimed at Millennials
- TravelSmart update
Advertising and Marketing Activity
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- Total above-the-line adspend fell by 13% in 2017
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- Figure 21: Top ten travel insurance advertisers (above-line, online display and direct mail advertising only), 2012/3-2016/17
- Television and direct mail were the main channels of advertising
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- Figure 22: Proportional distribution of travel insurance adspend (above-the line), by media type, year to October 31 2017
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- The Post Office is seen as the most trusted and differentiated brand
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- Figure 23: Attitudes towards and usage of selected brands, November 2017
- Key brand metrics
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- Figure 24: Key metrics for selected brands, November 2017
- Brand attitudes: Co-op rewards loyalty
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- Figure 25: Attitudes, by brand, November 2017
- Brand personality: Debenhams Personal Finance is most exclusive
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- Figure 26: Brand personality – macro image, November 2017
- The Post Office is seen as the most competent
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- Figure 27: Brand personality – micro image, November 2017
- Brand analysis
- The Post Office is seen as the most trusted provider
- MORE TH>N, Debenhams and esure need to address customer experiences
- Co-op Insurance leads in rewarding loyalty
- Thomas Cook is seen as the most fun brand
The Consumer – What You Need to Know
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- Over a fifth of consumers hold annual travel insurance as part of a current account package.
- Packaged current accounts can provide limited cover
- Single-trip policies were the most popular for recent holidays
- PCWs were used by the majority of people who bought standalone policies
- Cover for illness/injury was the most popular reason for cover
- Willingness to share information is high across the board
- Desire for simpler legal terminology
- UK-based customer services are important
Policy Ownership
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- Over a fifth of consumers hold annual travel insurance as part of a current account package
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- Figure 28: Ownership of annual travel insurance, by policy type and regional coverage, November 2017
- 53% of people do not have annual travel insurance
- Older Millennials are more likely to have cover through their current accounts
Insurance Arranged for Last Holiday Abroad
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- Single-trip policies were the most popular
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- Figure 29: Travel insurance arrangements for last holiday abroad, November 2017
- 90% of annual policyholders travelled to Europe
- EHICs provide basic cover in Europe
- Younger Millennials more willing to travel without cover
Use of Price Comparison Websites
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- PCWs were used by the majority of people who bought standalone policies
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- Figure 30: Usage of price comparison websites during buying process, November 2017
- Widest use of PCWs amongst Millennials
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- Figure 31: Usage of price comparison websites during buying process, by generation, November 2017
- PCW usage was higher among people who went on beach holidays
Reasons for Purchase
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- Cover for illness/injury was the most popular reason for cover
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- Figure 32: Reasons for arranging travel insurance, November 2017
- 45% of people bought travel insurance to protect their belongings
- Cover for political unrest/terrorism
Willingness to Share Information
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- Open Banking presents an opportunity
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- Figure 33: Willingness to share information with insurance companies, November 2017
- People aged 65+ are more willing to share information
Desire for Improvements
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- Desire for simpler legal terminology
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- Figure 34: Desire for improvements when arranging travel insurance, November 2017
- The hidden cost of the excess
- Most people are happy with the amount of providers
- Desire for fewer exclusions in older demographics
Most Important Factors
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- Price is the most important factor
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- Figure 35: Most important factors when arranging travel insurance, November 2017
- Brands can stand out through customer service
- Older travellers are more concerned about price
- Young people engaged more with online and reviews
- Price was less important for cruise holidays
- Level of cover is more important for those taking activity holidays
- UK-based customer service is more important for those going on cruises
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 36: Forecast for travel insurance gross written premiums – best, central and worst case scenarios, 2017-22
- Forecast methodology
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