Travel Insurance in Europe and Global Trends in Distribution Channel Usage

Travel Insurance in Europe and Global Trends in Distribution Channel Usage
Travel Insurance in Europe and Global
Trends in Distribution Channel Usage
Presentation at the Uniglobal Conference 2014
Prague, December 4th 2014
© Finaccord Ltd., 2014 Web: www.finaccord.com, E-mail: info@finaccord.com 1

Introduction
 Travelling
• Trips abroad across Europe
• Key growth segments
 Consumer behaviour
• Types of travel insurance bought
• Distribution channels and interfaces
• Leading providers through partnerships

For Europe as a whole, foreign travel is back to pre-recession
levels...
Number of foreign trips lasting four nights or more made by EU residents, 2004-2013 (million)
200
180
160
140
120
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Eurostat, UK ONS data, for 20 countries representing 83% of total EU trips abroad of four nights or more for 2012

...but there are major variations by country
Year-on-year change in number of foreign trips of four or more nights by country, 2012-2013 (five
largest countries providing data plus maximum and minimum rates)
Belgium
Germany
UK
Netherlands
Spain
Italy
Slovakia
-30% -20% -10% 0% 10% 20% 30%
Source: Eurostat, UK ONS
27.1%
10.2%
4.8%
-2.7%
-9.5%
-13.8%
-19.5%

The top three countries make up half of the European
travel insurance market...
Estimated share of European travel insurance market, 2013 (total market value = EUR 3.38 billion)
UK, 27.8%
Germany, 15.2%
Norway, 8.6%
Others, 48.5%
Source: Finaccord analysis of 20 countries (Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Turkey, UK)

Compound annual growth rate in premiums, 2009-2013
Germany
Norway
Turkey
Russia
20%
15%
10%
5%
0%
© Finaccord Ltd., 2014 Web: www.finaccord.com, E-mail: info@finaccord.com
UK
-5%
0 200 400 600 800 1,000
Gross written premiums for travel insurance, 2013 (EUR million)
6
...but they are mature, slow-growth markets
Source: Finaccord analysis of 20 countries (Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Turkey, UK)

Travellers aged 65-plus are only 10% of the total in the UK...
Segmentation of foreign trips by age band, 2012
65 and over,
55-64, 15.0%
Source: ONS Travel Trends
0-15, 5.1%
16-24, 9.2%
25-34, 19.4%
35-44, 20.4%
10.6%
45-54, 20.3%

...but they are on the increase...
Compound annual growth in the number of foreign trips by age band, 2003 to 2012
-6.2%
0.1%
-1.0%
-1.8%
-0.6%
-0.3%
2.5%
-0.9%
0-15
16-24
25-34
35-44
45-54
55-64
65 and over
All visits
-7.5% -6.0% -4.5% -3.0% -1.5% 0.0% 1.5% 3.0%

...and are the most important segment in the cruising market
Segmentation of fly / cruise (stay-on-board) trips by age band, 2012
0-15, 1.5% 16-24, 2.0%
25-34, 4.4%
35-44, 5.1%
45-54, 22.5%
55-64, 32.1%
65 and over,
32.5%

Demographics imply that the segments of older and
richer travellers are the main growth areas...
Quantum of the Seas: 348 metres long, 16 decks, 4,905 passengers

...with cruise ships getting more innovative as well as larger
Dodgems! Robot bartenders!
Skydiving and surf
simulators!

Global trends in consumer behaviour
 Analysis from Travel Metrics consumer research reports
released in July 2014
• Coverage of Australia, Canada, France, Germany, Italy,
Spain, UK and US
• 1,000 consumers surveyed in first seven countries,
2,000 in the US
• Results show unweighted averages across all eight
countries plus maximum values recorded in any single
country

German consumers are most likely to travel
domestically and abroad...
% of respondents that travelled abroad or within their own country for a week or more, 2014
Abroad only (for any period) – 14.2%
(maximum value: Canada – 31.6%)
Own country only (for a week or
more) – 22.3% (maximum value:
Australia – 30.1%)
No – 28.5%
(maximum value: US – 54.7%)
Both abroad (for any period) and
in own country (for a week or
more) – 35.0% (maximum value:
Germany – 53.2%)
Source: Finaccord Travel Metrics reports for Australia, Canada, France, Germany, Italy, Spain, UK and USA

...while UK travellers are most likely to take out
travel insurance
Propensity of consumers travelling abroad to acquire travel insurance, 2014
Yes – 69.2%
(maximum value: UK – 89.7%)
No – 30.8%

Single-trip policies remain the most
common type of policy...
Types of travel insurance acquired by all travelling consumers, 2014
Single-trip policy – 46.6%
(maximum value: Australia
– 68.1%)
Automatic policy with credit card
or bank account – 18.8%
(maximum value: France – 47.2%)
Automatic policy in price of
holiday or travel ticket – 14.1%
(maximum value: Italy – 27.9%)
Annual policy – 20.5%
(maximum value: Germany – 43.9%)
Note - analysis includes some travellers with more than one kind of policy

...and 80% of these are standard consumer policies
Standard consumer policy – 79.5%
(maximum value: Germany – 88.1%)
Non-standard consumer policy – 16.6%
(maximum value: UK – 28.5%)
Business policy – 4.0%
(maximum value: Spain – 5.9%)
Note – non-standard consumer policies include specialist backpacker, domestic-only, expatriate, gap-year or student, older
traveller, pre-existing medical condition and winter sports policies

More expensive policies cost more for a reason
• Customers with annual policies are more than twice as
likely to make a claim as those with single-trip policies
• The lowest claims frequency comes from policies
included automatically with holiday bookings or with
payment cards and bank accounts
• Customers with non-standard policies are more than
three times as likely to claim as those with standard
ones

Travel agents and tour operators remain the
main distribution channel in Italy
Distribution channels used to acquire stand-alone travel insurance, 2014
Direct from insurer – 38.7%
(maximum value: Australia –
51.8%)
other – 20.2%
Bank – 7.4%
Airline – 14.0%
Travel agent or tour operator – 19.7%
(maximum value: Italy – 27.3%)
Note – other distribution channels include automotive associations, cashback websites, employers, insurance aggregators,
insurance brokers, the Post Office, and supermarkets or other retailers

Munich Re has the most partnerships among travel
trade, transportation and financial organisations
Share of partnerships across 20 European countries by ultimate holding company, 2012
Munich Re, 13.3%
other, 59.2%
Source: Finaccord Travel Insurance and Assistance in Europe report, 2012
Allianz, 12.3%
Generali, 10.1%
AXA, 2.9%
HanseMerkur,
2.2%

Spanish customers still prefer to take out travel
insurance face-to face...
Distribution interfaces used to acquire stand-alone travel insurance, 2014
Face-to-face – 36.3%
Phone or post – 11.2%
Online – 52.5%

...and are also the most likely to use tablets and
mobile phones when buying online
Mobile phone – 3.0%
Laptop / desktop – 88.7%
(maximum value: Canada –
92.5%)
Tablet – 8.2%

Little variation for interfaces by age, but online
rises and face-to-face falls with income
Distribution interfaces used to acquire stand-alone travel insurance, 2014, segmented
into three income bands
t Face-to-face Online (laptop or desktop) Phone and post t
42%
37%
27%
43%
45%
50%
16%
19%
60%
50%
40%
30%
20%
10%
0%
Low income Medium income High income
23%

Any questions?

Finaccord is a leading market research, publishing and consulting company specialising in financial
services. We provide our clients with insight with a particular focus on marketing and distribution
strategies, including affinity and partnership marketing.
Our areas of expertise include: affinity and partnership marketing; automotive financial services;
bancassurance; commercial non-life insurance brokers; consumer intelligence; extended warranties
and insurance for white, brown and grey goods; home emergency insurance and assistance;
insurance and assistance linked to payment cards and bank accounts; mobile gadget and phone
insurance; professional indemnity insurance; retailer payments, banking, insurance and assistance;
road assistance; small business insurance; trade credit insurance; and travel insurance and
assistance.
Our international network of consultants is able to deliver information quickly and accurately across a
range of countries worldwide, basing research projects on robust data and knowledge.
Contact us
The Office Farringdon
24 Greville Street
London,
EC1N 8SS
Phone: +44 20 3178 2556
Fax: +44 20 7198 7902
Email: info@finaccord.com
www.finaccord.com
© Finaccord Ltd., 2014 Web: www.finaccord.com, E-mail: info@finaccord.com
24

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