In our newest Client Intelligence webinar, we dove deep into the evolving panorama of journey insurance coverage. From market pressures to shopper behaviour, listed below are the standout factors it’s worthwhile to know.
Journey insurance coverage premiums on the rise
We kicked off by inspecting the inevitable influence of inflation on journey insurance coverage. In line with our Journey Insurance coverage Worth Index, costs have surged by 11% for P1 quotes and eight% for P1-5 quotes since April final yr. Our Perception Analyst, Michael Dingwall, added, “Worth solely inflated roughly 11% and eight% retrospectively. I say ‘solely’ as a result of when evaluating to different insurance coverage sectors reminiscent of motor, which has seen a staggering ranges of inflation, it doesn’t come throughout as vital.” This has resulted in a mean market premium of £63 in April 2024, up by £6 from April 2023.
Moreover, Michael, highlighted, “Whereas customers could welcome extra steady costs, insurers face challenges from ongoing market constriction. Youthful travellers, notably 18-19 yr olds, noticed the best inflation at round 12%, whereas these over 60 noticed the bottom at 7%.”
Worldwide locations see double-digit worth will increase
Vacation spot issues! We noticed vital inflation of 15% to twenty% for worldwide journey excluding the US and Canada over the previous yr. Apparently, all locations skilled a slight deflation from October to December 2023, persevering with into February 2024.
However why is that this? Michael defined, “Touring throughout the pond isn’t financially viable in the mean time for a lot of singles, {couples}, and households because of the cost-of-living disaster. Wanting again to 2022 and 2021, it doesn’t appear to be a development associated to the time of yr.”
Variety of journey insurance coverage manufacturers up 18%
The journey market has seen a major improve of 18% within the whole variety of manufacturers between April 2023 and April 2024. Pre-existing manufacturers have launched new tiered propositions, whereas new manufacturers have entered the PCW market, diversifying the choices accessible to customers.
Michael defined, “Inside this ever altering panorama we’re additionally noticing an elevated abundance of manufacturers choosing abandoning the widespread product naming conference of ‘bronze, silver, gold, platinum’ for different extra distinctive choices.”
England overtakes Spain as high vacation spot
Our shopper information revealed a shocking shift: staycations in England have surpassed Spain as the highest vacation vacation spot for Brits. This development is pushed by the cost-of-living disaster, making home journey extra interesting.
Moreover, Brits are actually favouring September for holidays over the normal summer season months of July and August. This shift is probably going because of excessive costs and excessive summer season temperatures. The development in the direction of touring throughout ‘shoulder months’ is particularly distinguished amongst these over 65.
Millennials shun annual insurance policies
Client shopping for behaviour reveals a optimistic development, with 36% planning to buy annual insurance policies and 24% choosing single-trip insurance policies. Catherine Carey, our Head of Advertising, famous, “Youthful persons are much less probably to purchase annual insurance policies and extra inclined to purchase single-trip insurance policies or just for particular holidays.”
Our panel additionally explored coverage uptakes, revealing that 29% have already bought journey insurance coverage for journeys deliberate inside the subsequent 12 months, barely up from 28% final yr. This behaviour continues to be influenced by the pandemic and previous journey disruptions.
Insurers should adapt to remain forward
Within the webinar’s last dialogue, Michael emphasised the significance of pricing methods for UK journey, with staycations on the rise. He additionally famous the importance of pricing short-notice insurance policies, as highlighted by a Go.Evaluate press launch stating that just about a 3rd of journey insurance coverage patrons buy insurance coverage on the day of journey.
Addressing product stagnation, our CEO Ian Hughes mentioned innovation alternatives for insurers, reminiscent of leveraging AI to reinforce buyer experiences and guarantee complete protection. He harassed, “Something that enhances buyer enjoyment whereas guaranteeing safety is a chance.”
Key takeaways: navigating a risky market
Our panel concluded with important takeaways. Ian emphasised the necessity for a transparent technique with the power to tactically flex in a risky market. Catherine Carey highlighted the significance of understanding evolving shopper behaviour, and Michael Dingwall advocated for a data-driven strategy in unsure occasions.