The right coverage UK market stands apart


T


he UK leisure travel insurance market stands apart from the rest of Europe and even the US in its focus on price. James Howard, AIG Travel head of


international and direct marketing, notes “a higher propensity to buy travel insurance in Europe” than in many other markets around the world, saying: “Consumers see the value. In the UK that has tipped over into a highly commoditised market where travel insurance is sold very much on price. “In the past, we dealt with tour


operators and travel agents [in the UK] who commanded the insurance sale along with the package holiday sale. That has changed with the fragmentation of the package holiday and the emergence of direct-to- consumer travel insurance providers. “The UK market is now very much driven


by price comparison sites and by price. More often than not the consumer is not looking at what is included [in a policy], not hunting for the best deal, but looking for the cheapest. “This is not so obvious [a trend] in Europe. The UK is unique in that respect. It is a major change in the last 10-12 years. “The continental Europe and US markets


are geared around trip costs and the potential loss if a trip is cancelled. That is the most important item of financial exposure. In the UK, it is the medical risk [that is uppermost] when people travel. “There is still a segment of consumers who


don’t fully understand the value and merit of travel insurance, but continental Europe tends


%


10 20 30 40 50


0 UK France Germany Italy Figures rounded Source: Insurance Europe


NON-LIFE INSURANCE DISTRIBUTION CHANNELS Europe’s main markets


FIGURE 53: Direct


Intermediaries Agents Brokers Banks Other


The right coverage is not always uppermost in travellers’ minds, says James Howard, AIG Travel head of international and direct marketing


to be more traditional – with tour operators, travel agents and brokers still major players.” He says that is also true in the US where


“we work with hundreds of tour operators and travel agents. Price comparison sites are relatively small in the US and, as a proportion of our business, direct [selling] is small.” But in the UK “the market has moved


dramatically”. He says: “You can’t ignore the price comparison platforms – they are what the brokers were a few years ago. “Certain underwriters have carved out a


niche providing product at a price in the UK,” he says. But at the same time, he adds: “There are segments that specialist insurers have tapped into – the underwriters of impaired risks which market to older age groups and those with pre-existing health conditions. These also market to businesses selling niche products such as activity-based trips “that require more-refined insurance products”. Howard says: “We were a major player in the UK [leisure travel insurance market] but would not consider ourselves a specialist leisure insurer. We handle multinational clients who require cover in the UK, especially in the corporate travel space.”


INSURANCE distribution channels vary substantially by market (Figure 53). The market for travel insurance is substantial (Figure 54).


People more open to travelling The market in Europe is predominantly single trip versus multiple-trip insurance, he says, noting: “Asia has an even greater bias towards per trip products.” The mix in Europe may have changed with the rise of the low-cost carriers, he suggests,


OUTBOUND TOURISM POPULATION % made one or more outbound leisure trip, 2016


FIGURE 54: EU


Germany France Spain Italy UK


Netherlands Switzerland


22% 16% 39% 64% 75%


0 10 20 30 40 50 60 70 80 % Figures rounded Source: Eurostat


31.5% 54% 25%


Travel Weekly Europe Report 2018 | 39


18% 36% 3% 33% 4% 6%


22% 22%


12% 1% 4% 32% 13% 4% 2% 4% 46% 42%


4% 4%


0% 45% 9% 34%


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