The travel insurance market is set to undergo a challenging period in 2009, as consumers cut back on their spending. Holiday spend will undoubtedly come under pressure – but the annual holiday is so ingrained in the British psyche that few will willingly give it up. Since the majority of people wouldn’t even consider going abroad without having travel insurance, then providers look well placed to weather the storm. Annual policies may suffer, as people take fewer short breaks this year and return to the traditional ‘two weeks in the sun’, and as a result trade down to single-trip policies. However, providers may also be able to capitalise on a trend for travel to destinations outside the eurozone, prompted by the falling value of the pound.
Changing consumer demand isn’t the only factor at play, however. The big change, and challenge for the industry this year, is the new FSA regulatory regime, which may prompt some smaller travel firms to stop selling insurance, as well as encouraging more consumers to source cover independently. This, as well as the rise of the aggregators, will continue to put premium levels under pressure.
This report looks at the current and future challenges in the market and the size of the market and its forecast growth, for both single-trip and annual policies. Competitor products like the EHIC and packaged current accounts that include travel insurance are considered, as well as an overview of the key strengths and weaknesses in the market. Market shares are examined and the key players in the industry, as well as recent developments that have taken place, are summarised. Finally, after an analysis of different distribution channels in the market, The Consumer sections looks at key findings from our own consumer research and what these mean for providers.
Key report themes:
Consumers cutting back on holiday expenditure.
More people visiting destinations outside of the eurozone.
FSA regulation now extended to connected travel insurance.
The shift towards consumers arranging their cover independently.
Aggregators driving intense price competition in the market.
The shift towards annual travel insurance, which may change this year.