Travel Insurance - UK - February 2008

Table of Contents

• Issues in the Market
• Key issues
• Abbreviations
• Market in Brief
• Market growth
• Changing purchasing habits, changing distribution channels
• Focus on price leaves consumers in the dark...
• ...and innovation is at a premium
• Red tape
• Holiday patterns favour annual policies
• Consumer research findings: Holiday habits
• Consumer research findings: Insurance ownership
• Consumer research findings: Attitudes towards travel insurance
• Internal Market Environment
• Key Points
• FSA regulation...
• ...extends to the whole market
• Trust still an issue...
• ...with growing numbers of complaints
• Aggregator push...
• ...leads to concerns over regulation
• Addressing discrimination
• Holiday market presses on
  • Figure 1: Domestic and overseas holidays volume, 2002-07
• Life is a journey
  • Figure 2: Outbound holiday visits, by region visited, 2001-06 (Number of visits abroad from UK)
• Friends reunited
• Paying for pleasure
  • Figure 3: Domestic and overseas holidays expenditure, 2002-07
  • Figure 4: Average spend per trip, 2002-07
• Changing booking methods
  • Figure 5: Inclusive holidays versus independent holidays, by volume, 2001-06
• Free cover undermining sales
• Broader Market Environment
• Key Points
• Credit crunch -- putting the brakes on consumer spending?
• Holiday spend is the top priority
  • Figure 6: UK spending priorities, January 2007
• Healthy PDI
  • Figure 7: PDI and consumer expenditure, at constant 2002 prices, 2002-12
  • Figure 8: Trends in personal disposable income and consumer expenditure, 2002-12
• Population changes
  • Figure 9: Forecast adult population trends, by socio-economic group, 2002-12
• Lucrative market among older travellers
  • Figure 10: Forecast adult population trends, by lifestage, 2002-12
• CSR -- limited development in the wider insurance sector...
• ...and even less in travel insurance
• Scope for change
• ClimateWise should further drive CSR efforts
• Competitive Context
• Key Points
• European Health Insurance Card
• Added-value accounts
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Who' s Innovating?
• Key Points
• CSR -- creating a green travel industry...
• ...but plenty of scope for further innovation
• Back-office technology
• Regulation driving innovation
• Premium pensioners
• The final frontier
• Market Size and Forecast
• Key Points
• Market growth
  • Figure 11: Travel insurance market size, by gross written premiums, 1998-2008
• Shrinking margins
• Forecast
  • Figure 12: Travel insurance market size, by gross written premiums, 2002-12
• Factors used in the forecast
• Segment Performance
• Key Points
• Continued trend to annual policies
  • Figure 13: Travel insurance segment performace, 1999-2008
• Holiday patterns move away from single-trip policies
• Market Share
• Key Points
• Norwich Union makes progress
  • Figure 14: Estimated travel insurance market share, 2007
• Further concentration likely
• Companies and Products
• AXA
• Norwich Union
• AIG/New Hampshire
• UKI
• Fortis Insurance
• Brand Communication and Promotion
• Key Points
• Advertising spend
  • Figure 28: Travel insurance adspend, 2003-07
  • Figure 29: Travel insurance adspend, by provider, 2003-07
• Direct mail key to advertising success
  • Figure 30: Travel insurance adspend, by outlet type, Year to October 2007
• Marketing themes
• Focus on price
• Importance of medical cover
• Link promotions
• CSR and the new puritans
• Channels to Market
• Key Points
• Travel agents continue to lose market share
  • Figure 31: Source used to obtain last policy, 2003-08
• Will travel agents' share freefall?
• Free cover steps up
• High street expansion
• Aggregators enter on a high
• The Consumer -- Holiday Trends
• Key Points
• Two thirds of adult holidaymakers have taken an overseas trip
  • Figure 32: Holidays taken in the past 12 months, October 2007
  • Figure 33: Holiday habits, by type of holiday, October 2007
• Europe family boundaries
• Third agers kick back
• Young global community
• Staying closer to home
• Booking behaviour
  • Figure 34: Type of holiday taken in the past 12 months, October 2007
• Southern independence
• Holiday frequency
  • Figure 35: Total holidays taken in the past 12 months, October 2007
• Future intentions
  • Figure 36: Future holiday intentions, October 2007
• The Consumer -- Travel Insurance Usage
• Key Points
• Coverage reaching saturation point?
  • Figure 37: Travel insurance ownership, October 2007
• Youngsters shunning insurance?
  • Figure 38: Adults who have taken a holiday in the past 12 months, by lifestage and Mintel' s Special Groups, October 2007
• Short or long, European or further flung, insurance is still key
  • Figure 39: Travel insurance ownership, by type of holiday taken, October 2007
• Annual policies reaching a peak?
  • Figure 40: Type of policy held, October 2007
  • Figure 41: Type of policy held, 1999-2007
• North/south divide
  • Figure 42: Annual travel policyholders, by region and socio-economic group, October 2007
• Source of most recent policy
  • Figure 43: Source used to obtain last policy, 2003-08
• Travel agents continue to lose travel insurance business
• Internet sales driven by professional couples
  • Figure 44: Detailed breakdown of purchasing channels, October 2007
• Retired comfortable with traditional channels
• Free cover for upmarket families
• Appendix -- Holiday Trends: Detailed Demographics
  • Figure 52: Most popular holidays taken in the past 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, household income, tenure, region, ACORN category, media usage and supermarket usage, October 2007
  • Figure 53: Further holidays taken in the past 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, household income, tenure, region, ACORN category, media usage and supermarket usage, October 2007
• Appendix -- Travel Insurance Usage: Detailed Demographics
  • Figure 54: Travel insurance ownership, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, household income, tenure, region, ACORN category, media usage and supermarket usage, October 2007
  • Figure 55: Source used to obtain last policy, by gender, age, socio-economic group, marital status, lifestage, Mintel' s Special Groups, working status, household income, tenure, region, ACORN category, media usage and supermarket usage, October 2007
• Appendix -- Attitudes Towards Travel Insurance: Detailed Demographics
  • Figure 56: Most popular attitudes towards travel insurance, gender, age, socio-economic group, marital status, lifestage, Mintel' s Special Groups, working status, household income, tenure, region, media usage and supermarket usage, October 2007
  • Figure 57: Next most popular attitudes towards travel insurance, by gender, age, socio-economic group, marital status, lifestage, Mintel' s Special Groups, working status, household income, tenure, region, media usage and supermarket usage, October 2007
• Appendix -- Target Group Demographics
  • Figure 58: Target group demographics, by gender, age, social grade, lifestage, income, tenure, ACORN group, and commercial TV viewing, October 2007Figure 59: Target group demographics, by marital status, children in household, Special Groups, working status, region, newpaper readership, media usage, and supermarket usage, October 2007