The holiday market is booming, and travel insurance sales are up. However, the market for travel insurance is a difficult one for insurers - new regulation, technology and intense competition make for a challenging environment.

This report examines the factors driving the overall growth in the travel insurance market - the number of overseas holidays, the pattern of holiday taking and of holiday booking, and the growing adventurousness of British travellers, as well as those factors that are eating into margins.

• Issues in the Market
• Key issues
• Abbreviations
• Market in Brief
• Premium income up...
  • Figure 1: Average travel insurance premium per insured overseas visit, 2001-06
• ...but competition makes for a tough market
  • Figure 2: Source used to obtain last policy, 2000-07
• Regulation remains an issue
• A product with a wide customer base.
• Internal Market Environment
• Key points summary:
  • Holiday market continues to boom...
• Figure 3: Domestic and overseas holiday volume, 2000-06
• ...with short breaks replacing the fortnight abroad
  • Figure 4: Short versus long holidays by volume, 2001-06
• Independent travel sidelines the travel agents
  • Figure 5: Holidays abroad taken in the last 12 months, October 2006
• Escaping the high street
  • Figure 6: Independent overseas holidays, 2001-06
• Holidaymakers becoming more adventurous...
  • Figure 7: Outbound holiday visits, by region visited, 2000-05
• ...with activity holidays on the increase
  • Figure 8: Overseas activity holidays, 2000-06
• Snowsports market continues to grow
  • Figure 9: Snowsports holiday market, 2000/01-2006/07
• Overseas property boom playing a role
• FSA regulation -- raising standards
• Travel agents face Treasury review in 2007...
• ...but agents defend their sales practices
• Debate as to the Treasury' s recommendations
• The FSA bares its teeth
• Claims costs under control -- but margins still tight
• Commoditisation
• Broader Market Environment
• Key points summary:
• More money -- more holidays?
  • Figure 10: Trends in personal disposable income and consumer expenditure, 2001-11
• Ageing population changes insurance requirements
  • Figure 11: Trends in the age structure of the UK population, by gender, 2001-11
• Internet access hits saturation point...
  • Figure 12: Internet penetration, by gender, socio-economic group and age, 2001-06
• ...but familiarity grows
  • Figure 13: Websites purchased from in the last three months October 2002-October 2006
• Competitive Context
• Key points summary:
• European Health Insurance Card
  • Figure 14: Proportion of travellers without insurance for their last overseas holiday, by gender, age and socio-economic group, October 2006
• Packaged accounts
  • Figure 15: UK current account holders, by account type, January 2006
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Size and Forecast
• Key points summary:
• Growth struggles to outpace inflation
  • Figure 16: Travel insurance market size, by gross written premiums, 1997-2007
• Real premiums falling...
  • Figure 17: The value of the travel insurance market, the number of overseas holidays and the average premium per overseas visit, 2001-07
• ...but underwriting efficiencies counterbalance claims inflation
• Forecast
  • Figure 18: Forecast of the value of the travel insurance market, 2006-11
  • Figure 19: Forecast of the number of overseas holidays and the average premium per overseas visit, 2006-11
• Some things to consider
• Factors used in the forecast
• Holidays abroad forecast
• Segment Performance
• Key points summary:
• Annual policies still gaining ground
  • Figure 20: Travel insurance segment performance, 1999-2007
• Annual policies in tune with modern holiday patterns
• Will the market see a 50/50 split?
• Market Share
• Key points summary:
• AXA boosts market share...
  • Figure 21: Estimated travel insurance market share, 2006
• ...but rivals are competing hard
• Companies and Products
• Key points summary:
• A wide variety of partnerships and alliances
  • Figure 22: Selected providers of travel insurance and their underwriters (travel agents and tour operators), 2007
• Big five banks split their underwriting requirements
  • Figure 23: Selected providers of travel insurance and their underwriters (banks, building societies, retailers and others), 2007
• Smaller providers struggling with margins...
• ...but still the new entrants come
• AXA
• RBS Group
• AIG
• Europ Assistance
• White Horse Insurance Ireland
• Brand Communication and Promotion
• Key points summary:
• Limited adspend for a mass-market product
  • Figure 24: Travel insurance adspend, 2001-06
• Direct mail reflects cross-selling opportunities
  • Figure 25: Key travel insurance marketing outlets, year to September 2006
• High spenders reflect route to market
  • Figure 26: Leading travel insurance advertisers, year to September 2006
• Channels to Market
• Key points summary:
• Travel agents' market share declines
  • Figure 27: Source used to obtain last policy, 2000-07
• Booking patterns, not price, are the key trigger
• Packaged accounts are a growing threat...
  • Figure 28: Source used to obtain last policy, 2007
• ...while aggregator sites could push down premiums
• Insure & Go makes its presence felt
• The Consumer -- Holiday Patterns and Insurance Penetration
• Key points summary:
• Nearly 23 million adults took an overseas holiday in the last year
  • Figure 36: Holidays abroad taken in the last 12 months, October 2006
• Relaxation and 5-star facilities are most desired features
  • Figure 37: Statements detailing factors that make holidays enjoyable, October 2006
• Younger people want hot weather
  • Figure 38: Statements detailing factors that make holidays enjoyable, by gender, age and socio-economic group, October 2006
• A stubborn core of people travel uninsured
• Figure 39: Proportion of travellers with insurance for their last overseas holiday, October 2006
• Women and the over-55s are the most adamant about cover
  • Figure 40: Proportion of travellers with insurance for their last overseas holiday, by gender, age and socio-economic group, October 2006
• Implications and opportunities
• The pre-/no family group feels ' immune'
  • Figure 41: Proportion of travellers with insurance for their last overseas holiday, by lifestage and Mintel' s Special Groups, October 2006
• Implications and opportunities
• Broadsheet readers are not so sensible
  • Figure 42: Proportion of travellers with insurance for their last overseas holiday, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2006
• Implications and opportunities
• The Consumer -- Seasonality and the Rise of the Annual Policy
• Key points summary:
• ' Free' covers changes the seasonal pattern somewhat
  • Figure 43: Seasonal distribution of travel insurance sales, October 2006
• Younger holidaymakers ' arrange and go'
  • Figure 44: Seasonal distribution of travel insurance sales, by gender, age and socio-economic group, October 2006
• Annual policy purchase is spread throughout the year
  • Figure 45: Seasonal distribution of travel insurance sales, by type of insurance policy, October 2006
• Rise of the annual policy continues apace
  • Figure 46: Proportion of coverage when going abroad, by type of insurance policy, 1999-2007
• 45-64s are the keenest proponents of annual policies
  • Figure 47: Type of policy purchased, by gender, age and socio-economic group, October 2006
• Implications and opportunities
• Those residing in the south favour annual policies
  • Figure 48: Type of policy purchased, by TV region, October 2006
• Implications and opportunities
• ABC1 third age group members are canny consumers
  • Figure 49: Type of policy purchased, by lifestage and Mintel' s Special Groups, October 2006
• Implications and opportunities
• Greenbee will have success in marketing to Waitrose customers
  • Figure 50: Type of policy purchased, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2006
• Implications and opportunities