Abstract
Despite aggressive price promotions and the FSA imposing tight regulations, the travel insurance market has continued to grow, largely due to the continuing rise in annual policies and strong consumer desire to go on holiday. This, though, has been accompanied by an increasing commoditisation in the market - not helped by the growing influence of the aggregator sites. However, increased focus on the level of cover offered and exclusions could move consumers away from shopping for travel insurance by price alone.
This report examines the trade-off between tightening incomes and the imposition of FSA regulation against the continuing growth of the travel and tourism market. Will consumers tighten their belts in 2008, or is the holiday on its way from luxury to necessity? Furthermore, will the drive towards price-driven competition continue to increase?
As well as assessing the overall size of the market, this report examines the major developments seen since February 2007, the last time Mintel investigated this sector of the insurance industry. Consumer research tracks changing preferences - in terms of both policy type and arrangement preferences - while those factors that are set to impact sales over the coming years are also assessed.
Key themes:
- Increased regulations squeezing already tight margins with potential to change the face of the distribution channels.
- An ageing population putting pressure on underwriters to create affordable cover for older consumers.
- Intense price competition, particularly from aggregators.
- A growth in independent holiday bookings driving standalone insurance but increasing the risk of consumers holidaying without cover.
- A complex product with consumers largely unaware of cover and exclusions.
- Increased holidays and short breaks are favouring the annual policy and growth is evident within free annual travel insurance offered with premium bank accounts.
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