UK Travel Insurance 2010

Date: September 1, 2010
Pages: 59
Price:
US$ 2,795.00
Publisher: Datamonitor
Report type: Brief Review
Delivery: E-mail Delivery (PDF)
ID: U8873FE5EB1EN
Leaflet:

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UK Travel Insurance 2010
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
  • 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.
Highlights

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
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