Introduction
This report is a valuable source of information on the UK travel insurance market. It provides analysis and data for market sizes, consumer trends and the key competitors in the travel insurance sector. It also includes with market drivers and recent developments as well as forecasts until 2014.
Features and benefits
Economic uncertainty across UK consumers, the expense of longer haul flights and the exchange rates between the pound sterling and foreign currencies has led to a lower propensity to travel.
Travel underwriters have stated, in conjunction with ABI figures, that they have been increasing their premium rates. However, due to the lower pricing and increasingly popularity of packaged annual cover, the overall average price for travel insurance has decreased.
The most notable difference in 2009 was the increase in that of radio campaigns. In 2008, radio advertising made up only 0.2% of the total industry advertising spend in 2008 but rose to 3.1% in 2009. These figures are often dependant on the market players' decisions in a particular year.
Your key questions answered
This report is a valuable source of information on the UK travel insurance market. It provides analysis and data for market sizes, consumer trends and the key competitors in the travel insurance sector. It also includes with market drivers and recent developments as well as forecasts until 2014.
Features and benefits
- Insight into the main competitive developments taking place in the UK travel insurance market and their impact.
- A detailed analysis of the marketing spend of the top 10 UK travel insurance advertisers.
- GWP forecasts to 2014, based on Datamonitor’s in-house sizing model, expertise and primary interviews with top travel insurers.
Economic uncertainty across UK consumers, the expense of longer haul flights and the exchange rates between the pound sterling and foreign currencies has led to a lower propensity to travel.
Travel underwriters have stated, in conjunction with ABI figures, that they have been increasing their premium rates. However, due to the lower pricing and increasingly popularity of packaged annual cover, the overall average price for travel insurance has decreased.
The most notable difference in 2009 was the increase in that of radio campaigns. In 2008, radio advertising made up only 0.2% of the total industry advertising spend in 2008 but rose to 3.1% in 2009. These figures are often dependant on the market players' decisions in a particular year.
Your key questions answered
- How has the travel insurance market been faring in the past and how is it forecast to perform in the next four years?
- What have been the changing consumer attitudes and trends resulting from the recession?
- How does my travel insurance business benchmark against the competition?
Executive Summary
Travel insurance coverage was under the spotlight following an eventful year for travelers
The Icelandic volcanic ash cloud led to an estimated £62m payout
The collapse of airlines and travel agencies led to a number of holiday cancellations
The coalition Budget will increase the tax on travel cover
Travel insurance marketing spend fell by more than a quarter in 2009
Marketing and advertising in the travel insurance industry fell by 27.3% in 2009
Press advertising is the most prominent strategy for the top 10 travel insurance advertisers
The number of visits abroad dropped dramatically in 2009 by 15%
The number of visits abroad fell to 59 million in 2009
Further decreases in travelers and policy sales will lead to market contraction
2010 will experience a further decline in the number of individuals traveling abroad
Rates are expected to rise despite downward pressure from competition
OVERVIEW
Catalyst
Summary
MARKET CONTEXT
Introduction
Travel insurance coverage was under the spotlight following an eventful year for travelers
The Icelandic volcanic ash cloud led to an estimated £62m payout
The collapse of airlines and travel agencies led to a number of holiday cancellations
The coalition Budget will increase the tax on travel cover
Total travel Insurance gross written premiums contracted by 3% in 2009
The travel insurance market shrank to £744m in 2009
The proportion of premium income derived from annual policies continued to rise in 2009
The difference in average premium rates for annual and single trip policies is decreasing
The number of annual multi-trip policies has increased at the expense of single trip policies
Profit margins are shrinking in the UK travel insurance market
The gross loss ratio for UK travel insurance increased in 2009
Claims inflation decreased despite the total claims bill increasing in 2009
Medical expenses are continuing to increase
CUSTOMER FOCUS
Introduction
The number of visits abroad dropped dramatically in 2009 by 15%
The number of visits abroad fell to 59 million in 2009
The number of visits abroad fell in every quarter since Q3 2008
Visits to all geographic regions fell in frequency, though this was the most pronounced for American trips
The number of business trips fell by almost 2 million in 2009
The number of foreign holidays taken by UK residents saw a downturn of 15.5% in 2009
88% OF UK CONSUMERS WHO TRAVEL OVERSEAS TAKE OUT TRAVEL INSURANCE
Younger consumers are more likely to travel abroad, albeit fewer times in a year
Older UK travelers were more likely to hold travel insurance policies
Younger customers are more likely to purchase single trip cover as they go on holiday less often
Lloyds TSB distributed the most travel insurance policies
Six of the top 10 travel insurance distributors were bancassurers
The direct channel is dominant in travel insurance across all age groups
Travel insurance marketing spend fell by more than a quarter in 2009
Marketing and advertising in the travel insurance industry fell by 27.3% in 2009
Direct mail marketing accounted for over 57% of the total advertising spend in 2009
Press advertising is the most prominent strategy for the top 10 travel insurance advertisers
The overall spend of the top 10 travel insurance advertisers decreased in 2009
COMPETITIVE DYNAMICS
Introduction
The corporate partnerships space is seeing a number of developments
Arc Legal Assistance became the new provider of Aviva travel legal expenses insurance
Mondial renewed its deal with Lastminute.com
Fortis will underwrite travel insurance for Tesco Bank
ACE Europe took over the ASDA travel insurance book
Fortis and UK General signed their first major partnership contract
Mapfre Assistance has acquired the Insure and Go contract
Munich Re joins the top 5 players in the UK travel insurance market
AXA retains its clear market dominance
RBSI takes over the second place spot
Munich Re displayed an impressive rate of growth in 2009
Liverpool Victoria joins the top ten UK travel insurers
FUTURE DECODED
Further decreases in travelers and policy sales will lead to market contraction
2010 will experience a further decline in the number of individuals traveling abroad
Rates are expected to rise despite downward pressure from competition
The UK travel insurance market is forecast to recover from 2012
Overall market GWP will continue to decline until the recession ends
Improvements after the recession will depend on the performance of the top players
APPENDIX
Supplementary data
Competitive Dynamics
Definitions
Brokers
Bancassurers
Brandassurers
Gross written premiums
Research methodology
Primary research
Market context
Customer focus
Consumer surveys
ABI Statistics
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
Travel insurance coverage was under the spotlight following an eventful year for travelers
The Icelandic volcanic ash cloud led to an estimated £62m payout
The collapse of airlines and travel agencies led to a number of holiday cancellations
The coalition Budget will increase the tax on travel cover
Travel insurance marketing spend fell by more than a quarter in 2009
Marketing and advertising in the travel insurance industry fell by 27.3% in 2009
Press advertising is the most prominent strategy for the top 10 travel insurance advertisers
The number of visits abroad dropped dramatically in 2009 by 15%
The number of visits abroad fell to 59 million in 2009
Further decreases in travelers and policy sales will lead to market contraction
2010 will experience a further decline in the number of individuals traveling abroad
Rates are expected to rise despite downward pressure from competition
OVERVIEW
Catalyst
Summary
MARKET CONTEXT
Introduction
Travel insurance coverage was under the spotlight following an eventful year for travelers
The Icelandic volcanic ash cloud led to an estimated £62m payout
The collapse of airlines and travel agencies led to a number of holiday cancellations
The coalition Budget will increase the tax on travel cover
Total travel Insurance gross written premiums contracted by 3% in 2009
The travel insurance market shrank to £744m in 2009
The proportion of premium income derived from annual policies continued to rise in 2009
The difference in average premium rates for annual and single trip policies is decreasing
The number of annual multi-trip policies has increased at the expense of single trip policies
Profit margins are shrinking in the UK travel insurance market
The gross loss ratio for UK travel insurance increased in 2009
Claims inflation decreased despite the total claims bill increasing in 2009
Medical expenses are continuing to increase
CUSTOMER FOCUS
Introduction
The number of visits abroad dropped dramatically in 2009 by 15%
The number of visits abroad fell to 59 million in 2009
The number of visits abroad fell in every quarter since Q3 2008
Visits to all geographic regions fell in frequency, though this was the most pronounced for American trips
The number of business trips fell by almost 2 million in 2009
The number of foreign holidays taken by UK residents saw a downturn of 15.5% in 2009
88% OF UK CONSUMERS WHO TRAVEL OVERSEAS TAKE OUT TRAVEL INSURANCE
Younger consumers are more likely to travel abroad, albeit fewer times in a year
Older UK travelers were more likely to hold travel insurance policies
Younger customers are more likely to purchase single trip cover as they go on holiday less often
Lloyds TSB distributed the most travel insurance policies
Six of the top 10 travel insurance distributors were bancassurers
The direct channel is dominant in travel insurance across all age groups
Travel insurance marketing spend fell by more than a quarter in 2009
Marketing and advertising in the travel insurance industry fell by 27.3% in 2009
Direct mail marketing accounted for over 57% of the total advertising spend in 2009
Press advertising is the most prominent strategy for the top 10 travel insurance advertisers
The overall spend of the top 10 travel insurance advertisers decreased in 2009
COMPETITIVE DYNAMICS
Introduction
The corporate partnerships space is seeing a number of developments
Arc Legal Assistance became the new provider of Aviva travel legal expenses insurance
Mondial renewed its deal with Lastminute.com
Fortis will underwrite travel insurance for Tesco Bank
ACE Europe took over the ASDA travel insurance book
Fortis and UK General signed their first major partnership contract
Mapfre Assistance has acquired the Insure and Go contract
Munich Re joins the top 5 players in the UK travel insurance market
AXA retains its clear market dominance
RBSI takes over the second place spot
Munich Re displayed an impressive rate of growth in 2009
Liverpool Victoria joins the top ten UK travel insurers
FUTURE DECODED
Further decreases in travelers and policy sales will lead to market contraction
2010 will experience a further decline in the number of individuals traveling abroad
Rates are expected to rise despite downward pressure from competition
The UK travel insurance market is forecast to recover from 2012
Overall market GWP will continue to decline until the recession ends
Improvements after the recession will depend on the performance of the top players
APPENDIX
Supplementary data
Competitive Dynamics
Definitions
Brokers
Bancassurers
Brandassurers
Gross written premiums
Research methodology
Primary research
Market context
Customer focus
Consumer surveys
ABI Statistics
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer