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UK Travel Insurance Market 2019: Consumer Research Report

  • ID: 4833304
  • Report
  • Region: United Kingdom, Great Britain
  • 70 Pages
  • IRN Research
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FEATURED COMPANIES

34.6 million consumers (or 54% of all adults) have multi-trip travel insurance now or have had single trip insurance cover over the past year. Of these individuals, 29.1 million own standalone, separate travel insurance policies (i.e. they are not bundled into packaged bank accounts or other insurances). Single trip insurance (40% of consumers) is more popular than multi-trip insurance (25%). Adults with insurance are primarily those who have travelled abroad in the past year: 22% of adults who travelled abroad over the last year had no form of insurance.

Collectively, individuals owning standalone policies spent over £600 million on travel insurance premiums (gross written premiums) in 2018. The annual consumer travel insurance market for standalone, separate policies, as measured in terms of gross written premiums, has been in decline for the past few years.
 
Each year, around nine-in-ten policyholders start their customer journey from the standpoint of already owning multi-trip, annual travel insurance. They are repeat customers, i.e. they are not buying multi-trip insurance for their first time (they are not First-Time Buyers – FTBs). Their customer journey decision is to switch or renew: most ultimately renew. Just over one-in-ten policyholders switched provider in the past year and around one-in-seven were FTBs, new to the market. Over seven-in-ten policyholders renewed with the provider they used for travel insurance in the previous year.

For most consumers who ultimately renew their policies, renewing is best thought of as an action taken only after the policyholder has tried to get a better deal from another provider or from the current provider. A large majority search for alternatives and/or haggle with an incumbent provider to get a better deal before they finally decide to renew. Renewing, therefore, involves many of the same actions as a Switcher would undertake but with a different final outcome (staying rather than leaving).

Other interesting findings contained in the report are:

  • Price comparison websites are the focus of deal discovery and are important purchasing channels
  • Across all adults with any type of travel insurance (single trip or multi-trip), PCWs were the main channel via which policies were purchased. However, the importance of the PCW is much higher in the single trip policy market than it is in the multi-trip market. In the multi-trip market, sales direct to the provider are the leading sales channel.
  • When buying multi-trip insurance, consumers focus first on the cover provided and secondly on price, but when buying single trip insurance the focus is on price first and cover second.
  • Most travel insurance policyholders will negotiate to get a good insurance deal and there is little difference between policyholders based on the type of travel insurance policy they own. The desire to negotiate is strong for all types of policyholder, even those whose main priority is to cover or buying from a well-known brand.
  • Consumers who own multi-trip travel insurance find the experience satisfying and largely pain-free and the same can be said of the claims process
  • Almost one-quarter of multi-trip insurance policyholders are thinking of switching in the next year, with switching being strongly price-led

This report will examine the motivations, experiences and opinions of the UK travel insurance customer. It focuses primarily on annual multi-trip insurance, defined as multi-trip (annual) travel insurance which covers for multiple trips (e.g. all trips over the period of a year). However, the report also discusses places single trip insurance, i.e. insurance taken out for one specific trip. The research will identify and analyse consumer attitudes towards travel insurance, look at the claims experience of policyholders, and investigate why they choose one route to purchase over another. In addition, it will explore how price sensitivity is impacting the market. Essentially, the report studies the policyholder’s customer journey from the point where they recognise a requirement to make a purchase to the point when they are a customer, could make a claim, and may ultimately consider switching to a new provider.

For this report, the author commissioned research from MIS Group’s UK panel. The research was structured so that 2,051 consumers aged 18+ were asked if they owned an insurance policy. This generated 510 individuals who owned multi-trip travel insurance policy and 1,093 individuals who owned any type of travel insurance (multi-trip or single trip).

Note: Product cover images may vary from those shown
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FEATURED COMPANIES

1. Executive Summary

  • Almost 35 million consumers with travel insurance
  • Just over half of consumers covered
  • The market facing uncertainty and potential disruption
  • Policyholders are more active overseas trip takers, more affluent and more confident
  • The multi-trip policyholder is not the same type of person as the single-trip policyholder
  • Four-in-ten multi-trip policyholders get their cover bundled
  • Insured consumers like to journey online
  • For most multi-trip policyholders, the customer journey is a repeat process
  • First Time Buyers need support
  • Those switching are younger and more confident compared with those Renewing
  • But Switchers and Renewers tend to adopt similar approaches
  • Both are triggered into action by the renewal prompt
  • Price comparison websites, the focus of deal discovery and important purchasing channels
  • Its cover first when buying multi-trip insurance and price first when buying single trip insurance
  • Major brands find it easier to sell to Agile Buyers aged 18-24 and 45-54
  • Don’t assume an easier sell is an easy sell
  • Policyholders can only negotiate on certain policy features
  • Being a policyholder is a good experience
  • Few policyholders claim, and when they do the process seems to go smoothly
  • Almost one-quarter are thinking of switching in the next year

2. Introduction

3. Profile of the Policyholder

  • Almost one-quarter of adults have multi-trip travel insurance
  • Over half of consumers covered by some type of insurance
  • Consumers with multi-trip insurance are more affluent than those without
  • And travellers with multi-trip insurance are more affluent and older than travellers without
  • Travellers with multi-trip cover travel more frequently and more widely than travellers without this insurance
  • Consumers buying multi-trip cover tend to be older than those with single trip cover
  • Travellers with multi-trip cover go further, more often and for longer
  • Multi-trip policyholders tend to own standalone policies and pay for them annually

4. How Policyholders Approach Insurance

  • Risk aversion encourages insurance ownership
  • Giving consumers the ability to self-select insurance with confidence boosts uptake
  • Better offline support and buying options may help

5. The Customer Journey Begins

  • Almost nine-in-ten multi-trip policyholders are multiple customer journey takers.
  • Younger females the most likely to switch or enter the market
  • Switchers tend to be confident, self-reliant consumers who like shopping online
  • Switchers and FTBs are more likely to travel abroad
  • Renewers and Switchers often act in similar ways
  • And both Switchers and Renewers are spurred into action by the renewal prompt
  • If looking for a deal, the attention goes towards Price Comparison Websites
  • And the focus on PCWs will shape the next customer journey
  • PCWs offer the winning combination: easy access and the info required
  • PCWs are also a prime purchasing channel especially for single trip insurance

6. Price, Cover Or Brand

  • Multi-trip insurance less focused on price compared with single trip insurance
  • But multi-trip policyholders care less about brands
  • The greater the desire for an online journey, the greater the focus on price
  • The desire for an online journey weakens the focus on brands
  • Agile Renewers the easiest sell for major brands
  • Don’t assume an easier sell is an easy sell
  • Travel insurance policyholders need better information
  • And they need their information delivered in a concise manner

7. Being A Policyholder

  • Being a policyholder is an easy and satisfying process
  • Policy management is moving online
  • Less than one-in-ten policyholders have claimed in the past year
  • Claiming is a largely satisfying and smooth process

8. Ending The Journey: Customer Loyalty and Switching

  • Almost one-quarter are thinking of switching in the next year
  • Switching is habit forming
  • Switching is price led

9. Market Size and Trends

  • Travel insurance market estimated to be worth £610 million
  • A diverse market in terms of brands
  • Regulator challenges industry to improve access for people with pre-existing conditions
  • New Development in Travel Insurance
  • Uncertainty shrouds the future
  • FCA lays out its requirements in case of no deal Brexit

List of Figures
Figure 1 Ownership of multi-trip travel insurance and overseas trip taking among consumers
Figure 2 The type of travel insurance cover owned by consumers
Figure 3 Demographic profile of consumers with and without multi-trip insurance
Figure 4 Demographic profile of Overseas trip Takers with and without multi-trip travel insurance
Figure 5 Trip taking behaviour of overseas trip takers with and without multi-trip travel insurance
Figure 6 The demographic profile of consumers based on the type of travel insurance they have taken out
Figure 7 The trip taking behaviour of travellers by the type of insurance owned
Figure 8 Summary of the trip taking behaviour of travellers by type of insurance owned
Figure 9 The types of multi-trip policies owned and how they are paid for
Figure 10 The percentage of consumers who are risk averse
Figure 11 The percentage of consumers who are confident and self-reliant insurance buyers
Figure 12 The desire for an online customer journey by insurance owned and overseas travel behaviour
Figure 13 Policy acquisition and time with current provider and actions over the past year
Figure 14 The demographic profile of policyholders by actions taken in the past year
Figure 15 The profile actions taken in the past year by attitudes towards insurance
Figure 16 The profile of actions taken in the past year by trip taking behaviour
Figure 17 The negotiating activities of cover holders who renew at renewal time
Figure 18 Actions taken by Renewers by awareness of previous year’s premium
Figure 19 Resources consulted over the past two years by action taken in last year
Figure 20 Where multi-trip travel insurance policyholders would look to compare deals
Figure 21 Policyholder attitudes towards PCWs
Figure 22 From where the last travel insurance policy was purchased
Figure 23 The importance of cover vs price when buying travel insurance
Figure 24 The importance of brands when buying travel insurance owned
Figure 25 The price vs. cover focus of policyholders by key characteristics
Figure 26 The brand focus of policyholders by key characteristics
Figure 27 The brand and price focus of policyholders by key characteristics
Figure 28 Negotiation with the insurer when taking out a new policy or renewing
Figure 29 How policyholders read their policy documents
Figure 30 Why policy documentation is not read in full
Figure 31 Policyholder experience owning a travel insurance policy
Figure 32 The access to and use of online portals
Figure 33 The incidence of making a claim in the past year by policyholder characteristics
Figure 34 Claimant opinion of their last travel insurance claim
Figure 35 The profile of policyholders by whether they are thinking of switching in the coming year
Figure 36 The characteristics of policyholders by whether they are thinking of switching in the coming year
Figure 37 The factors that caused policyholders to switch provider
Figure 38 Estimated size of the UK consumer travel insurance market*
Figure 39 Estimated breakdown of the consumer travel insurance market*
Figure 40 Examples of Underwriters and providers in the travel insurance market, 2019

Note: Product cover images may vary from those shown
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  • MIS Group
Note: Product cover images may vary from those shown
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