Despite being an essential product for consumers, purchasing travel
insurance is a minefield for consumers; with complicated small print
and hundreds of different policies to choose from. The industry should
use innovations to make cost savings, simplify products and engage
better with consumers.”
Alexander Hiscox, Financial Services Analyst
This report looks in more detail at:
- Has the complexity of the travel insurance market led to a lack of consumer trust?
- Are young people being ignored within the travel insurance market?
- Will the launch of ‘signposting’ make it easier for older customers to get affordable travel insurance?
- Is there scope to increase the use of technology in the travel insurance market?
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Table of Content:
Introduction
Abbreviations
Executive Summary
The market
Market expected to grow in 2013
Figure 1: Forecast for total value of travel insurance GWP, 2007-17
Channels to market
Figure 2: Channels used to purchase travel insurance, 2008-12
Market factors
Trips to Europe increased, but trips outside Europe fell
Number and cost of claims reduce
‘Signposting’ introduced to help older consumers purchase travel insurance
Companies, brands and innovations
The Post Office brand stands out from the crowd on trust
Figure 3: Attitudes towards and usage of brands operating in the travel insurance sector, November 2012
Who’s innovating?
The consumer
Travel and holiday trends
Figure 4: Holiday destinations, October 2012
Travel insurance ownership
Figure 5: Travel insurance arrangements, October 2012
Travel insurance purchasing behaviour
Figure 6: Travel insurance purchasing, October 2012
Attitudes towards travel insurance
Figure 7: Attitudes towards travel insurance, October 2012
Travel insurance behaviours
Figure 8: Behaviours towards travel insurance, October 2012
What we think
Issues in the Market
Has the complexity of the travel insurance market led to a lack of consumer trust?
Are young people being ignored within the travel insurance market?
Will the launch of ‘signposting’ make it easier for older customers to get affordable travel insurance?
Is there scope to increase the use of technology in the travel insurance market?
Trend Application
Mobile phone apps to appeal to a younger audience
No-claims discounts to encourage greater loyalty
Focusing on the over-55s market will provide potential for growth
Market Drivers
Key points
The financial crisis impacts holiday trends
Figure 9: Domestic vs. overseas holidays, 2005-12
Trips to Europe increase, whilst longer-haul trips continue to decline
Figure 10: Outbound holiday visits, by region visited, 2007-11
Large reduction in the number of claims incurred
Figure 11: Travel insurance claims incurred, by volume and value, 2004-11
Cost per claim of medical expenses
Figure 12: Cost per medical travel insurance claim, 2004-11
Medical expenses are most costly
Figure 13: Number of claims incurred, by type of claim, 2011
‘Signposting’ helps older consumers
Many consumers are ordering an EHIC as an alternative to travel insurance
Going on holiday is seen as a luxury, but a necessary one
Figure 14: Agreement with the statement ‘Holidays are a luxury and holidays are a necessary spend’, October 2012
A fifth of consumers spend spare money on holidays
Figure 15: Trends in what extra money is spent on, December 2009-December 2012
The Pound nudges up against the Euro and Dollar
Figure 16: Spot exchange rates, US Dollar and euro into Pound Sterling, January 2008-November 2012
FSA regulation on selling travel insurance through bank accounts
SWOT Analysis
Figure 17: Travel insurance – SWOT analysis, 2012
Who’s Innovating?
Key points
EHIC app innovation
Confused.com launches new price comparison service for people with pre-existing medical conditions.
First Assist launches Travel Insurance Plus for higher-risk customers
OK to Travel puts no upper age limit on cover
Travel Insurance being offered on cashback websites
Direct Line aims to build brand loyalty through multi-product discounts
Live Chat customer service
Market Size and Forecast
Key points
Number of policies written increases, but GWP remains flat
Figure 18: Volume and value of single-trip and annual policies, 2006-12
Number of annual policies increasing, making up for the decrease in single policy sales
GWP is expected to gradually rise through to 2017
Figure 19: Forecast for total value of travel insurance GWP, 2007-17
Figure 20: Forecast for total market travel insurance GWP, 2007-17
Travel insurance policies are expected to grow at a faster rate
Figure 21: Forecast for total number of travel insurance policies written, 2007-17
Figure 22: Forecast for total market volume for travel insurance policies written, 2007-17
Forecast methodology
Market Share
Key points
AXA still has the largest share of the market
Figure 23: Top ten travel insurance underwriters, by GWP, 2009-11
Aviva, ACE and Ageas all make gains
Direct Line Group loses ground
Companies and Products
Brand Research
Brand map
Figure 24: Attitudes towards and usage of brands operating in the travel insurance sector, November 2012
Correspondence analysis
Brand attitudes
Figure 25: Attitudes, by travel insurance brand, November 2012
Brand personality
Figure 26: Travel insurance brand personality – macro image, November 2012
Figure 27: Travel insurance brand personality – micro image, November 2012
Brand experience
Figure 28: Usage of brands operating in the travel insurance market, November 2012
Figure 29: Satisfaction with various brands operating in the travel insurance market, November 2012
Figure 30: Consideration of brands operating in the travel insurance market, November 2012
Figure 31: Consumer perceptions of current performance for brands operating in the travel insurance market, November 2012
Figure 32: Travel insurance brand recommendation – Net Promoter Score, November 2012
Brand index
Figure 33: Travel insurance brand index, November 2012
Figure 34: Travel insurance brand index vs. recommendation, November 2012
Target group analysis
Figure 35: Target groups, November 2012
Figure 36: Usage of brands operating in the travel insurance market, by target groups, November 2012
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
For More Information
Contact:
Hemendra Parmar
State Tower
90 State Street, Suite 700
Albany, NY 12207
United States
Tel: +1-518-618-1030
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