In our newest Shopper Intelligence webinar, we dove deep into the evolving panorama of journey insurance coverage. From market pressures to client behaviour, listed below are the standout factors it is advisable to know.
Journey insurance coverage premiums on the rise
We kicked off by analyzing the inevitable impression of inflation on journey insurance coverage. In line with our Journey Insurance coverage Value Index, costs have surged by 11% for P1 quotes and eight% for P1-5 quotes since April final 12 months. Our Perception Analyst, Michael Dingwall, added, “Value solely inflated roughly 11% and eight% retrospectively. I say ‘solely’ as a result of when evaluating to different insurance coverage sectors resembling motor, which has seen a staggering ranges of inflation, it doesn’t come throughout as important.” 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, significantly 18-19 12 months olds, noticed the very best inflation at round 12%, whereas these over 60 noticed the bottom at 7%.”
Worldwide locations see double-digit value will increase
Vacation spot issues! We noticed important inflation of 15% to twenty% for worldwide journey excluding the US and Canada over the previous 12 months. 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 as a result of cost-of-living disaster. Trying again to 2022 and 2021, it doesn’t appear to be a pattern associated to the time of 12 months.”
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 obtainable 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 client information revealed a stunning shift: staycations in England have surpassed Spain as the highest vacation vacation spot for Brits. This pattern is pushed by the cost-of-living disaster, making home journey extra interesting.
Moreover, Brits at the moment are 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 pattern in the direction of touring throughout ‘shoulder months’ is very distinguished amongst these over 65.
Millennials shun annual insurance policies
Shopper shopping for behaviour exhibits a optimistic pattern, with 36% planning to buy annual insurance policies and 24% choosing single-trip insurance policies. Catherine Carey, our Head of Advertising and marketing, famous, “Youthful individuals are much less seemingly 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 12 months. This behaviour remains to be influenced by the pandemic and previous journey disruptions.
Insurers should adapt to remain forward
Within the webinar’s remaining 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.Examine 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, resembling leveraging AI to reinforce buyer experiences and guarantee complete protection. He pressured, “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 client behaviour, and Michael Dingwall advocated for a data-driven method in unsure occasions.
