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Travel Insurance and Assistance in New Zealand

  • February 2016
  • -
  • Finaccord
  • -
  • 36 pages

Finaccord’s report titled Travel Insurance and Assistance in New Zealand is about the current status and likely future development of the market for stand-alone travel insurance policies in New Zealand. It includes the following unique features:

- data spanning 2011 to 2015 for the underlying travel market with a segmentation by type of journey (between holiday and business trips) and with related commentary concerning the popularity of different overseas destinations;

- data for the size of the market for stand-alone travel insurance and assistance in New Zealand between 2011 and 2015 in terms of premiums and policies, with a segmentation between single-trip and annual cover;

- analyses of the share of distribution relationships of travel insurance providers split between travel trade, transportation and financial organisations, based on a primary survey of 125 actual and potential distributors of stand-alone travel policies including airlines, banks, insurance brands and specialised lenders, plus both traditional and online travel trade entities;

- a review of other direct and affinity distribution channels used in New Zealand including automotive clubs, direct sales, online aggregators, other online brands and retailers, plus cover packaged with payment cards and bank accounts;

- estimates for the market share of travel insurance and assistance gross premiums for the top ten underwriters of this type of cover in New Zealand in 2015 with these data points expressed as a percentage range (e.g. 5.0% to 7.5%);

- forecasts to 2019 for both the underlying travel market and for the size of the market for stand-alone travel insurance and assistance in terms of premiums and policies, with the same segmentation as that specified above for the period from 2011 to 2015.

The report, which represents an update and expansion to a previous Finaccord study on the subject, is accompanied by an Excel PartnerBASE™ dataset that details the travel insurance partnerships identified, plus a convenient market data annexe, also in Excel format. This annexe can be used as a convenient source of data already in Excel format which means that there is no need for users to re-enter data from the PDF report into their own Excel worksheets.

Table Of Contents

Travel Insurance and Assistance in New Zealand
00 EXECUTIVE SUMMARY 1
10 INTRODUCTION 3
What is this report about? 3
Rationale 3
This report builds upon Finaccord's previous ground-breaking studies about this topic 3
Methodology 3
Primary research 3
The survey includes 125 travel trade, transportation and financial organisations 3
including airlines, banks, insurance brands and both traditional and online travel trade entities 4
Market data 4
External sources 4
Travel insurance and assistance: how it all fits together 5
The term 'travel insurance' can refer to protection from a heterogeneous range of risks… 5
and assistance companies play a fundamental role in the travel insurance industry 5
Definitions 6
Terms and abbreviations 6
Types of packaged travel insurance and assistance 6
Operating models 7
Weighted shares 7
Currencies, exchange rates and inflation 8
PartnerBASE 8
Finaccord 8
20 MARKET ANALYSIS 10
Introduction 10
Underlying foreign travel market 10
Outbound travel from New Zealand has shown reasonably strong growth in recent years… 10
…although business trips have not kept pace with the leisure market 10
Australia is by far the most common destination, accounting for almost a half of all foreign trips 12
Market for travel insurance and assistance 12
The travel insurance market grew steadily in value between 2011 and 2015… 12
… with annual policies increasing at a faster rate than single-trip policies 13
Distribution through travel trade, transportation and financial organisations 15
Summary of organisations researched 15
Provision rates 16
Less than two thirds of potential distributors actually do promote stand-alone travel cover… 16
… which may be a consequence of the increasing importance of direct distribution 16
Operating models 17
Most distributors work with a single, external underwriter albeit there are some exceptions 17
Competitor share of partnerships - travel trade entities 20
Allianz New Zealand holds the highest number of partnerships in this category… 20
…with two other insurers also particularly active 20
The weighted analysis confirms the prominence of Allianz New Zealand and Cover-More 20
Competitor share of partnerships - transportation organisations 22
Three underwriters each work with three transportation companies… 22
…with Cover-More's partnership with Air New Zealand likely to be particularly important 22
Competitor share of partnerships - financial organisations 24
Among financial sector partners, Allianz New Zealand works with the highest number of partners… 24
… and three other insurers also claim multiple distribution arrangements in this arena 24
In the weighted analysis, Cover-More and Southern Cross emerge as the likely sector leaders 24
Travel insurance and assistance linked to payment cards and bank accounts 26
Other distribution channels 28
Automotive clubs 28
The New Zealand Automobile Association maintains a partnership with Allianz New Zealand 28
Direct distribution by specialist travel insurers 28
A number of insurers distribute directly through specialist brands 28
Online aggregators and brokers 28
Both quasi-aggregators and traditional insurance brokers sell travel cover in New Zealand 28
Other online brands 29
Various underwriters at Lloyd's of London distribute insurance online through a range tied agents 29
Retailers 29
Two major retail chains in New Zealand have developed a travel insurance proposition 29
Other types of distributor 29
Several types of affinity and corporate partner are also used to distribute travel cover… 29
… including professional associations, travel guides and travel money providers… 30
… as well as New Zealand Post 30
Leading competitors 30
The two market leaders are likely to claim over a half of the total market value 30
Southern Cross has removed the excess associated with medical claims arising from travel policies 31
Overall, only four competitors are likely to hold a market share of premiums in excess of 10% 31
… albeit the tail of smaller underwriters is not especially long 31
Forecasts 33
Underlying foreign travel market 33
Growth in holiday trips will continue to outstrip that of business trips… 33
Market for travel insurance and assistance 35
… and the rise in annual policies will be higher than that for single-trip policies 35
LIST OF GRAPHICS / TABLES
00 EXECUTIVE SUMMARY 1
Key market data for travel insurance and assistance in New Zealand, 2011, 2015 and 2019 2
10 INTRODUCTION 3
Travel insurance and assistance: how it all fits together 5
20 MARKET ANALYSIS 10
Number of foreign trips undertaken by residents of New Zealand, segmented by purpose of trip, 2011 to 2015 11
Number of foreign trips undertaken by residents of New Zealand, segmented by purpose of trip, 2011 to 2015 (table) 11
Destinations of foreign trips undertaken by residents of New Zealand, 2015 12
Estimated gross written premiums and policy numbers for travel insurance and assistance in New Zealand, 2011 to 2015 14
Estimated gross written premiums and policy numbers for travel insurance and assistance in New Zealand, 2011 to 2015 (table) 15
Summary of travel trade, transportation and financial organisations researched in New Zealand, segmented by type, 2015 16
Provision rates for stand-alone travel insurance and assistance in New Zealand, segmented by type of travel trade, transportation and financial organisation, 2015 17
Operating models used for stand-alone travel insurance and assistance in New Zealand, segmented by type of travel trade, transportation and financial organisation, 2015 18
Operating models used for stand-alone travel insurance and assistance in New Zealand, segmented by type of travel trade, transportation and financial organisation, 2015 (table) 19
Partnerships with travel trade organisations offering travel insurance and assistance in New Zealand, 2015: weighted and unweighted competitor share 21
Partnerships with transportation organisations offering travel insurance and assistance in New Zealand, 2015: weighted and unweighted competitor share 23
Partnerships with financial organisations offering travel insurance and assistance in New Zealand, 2015: weighted and unweighted competitor share 25
Provision rates for travel insurance and assistance linked to payment cards and bank accounts in New Zealand segmented by product function and level, and by type of cover 27
Individual competitors' estimated market shares of gross written premiums and other revenues for stand-alone travel insurance and assistance in New Zealand, 2015 32
Individual competitors' estimated market shares of gross written premiums and other revenues for stand-alone travel insurance and assistance in New Zealand, 2015 (table) 33
Number of foreign trips undertaken by residents of New Zealand, segmented by purpose of trip, 2019 (forecast) 34
Number of foreign trips undertaken by residents of New Zealand, segmented by purpose of trip, 2019 (forecast) (table) 34
Gross written premiums and policy numbers for travel insurance and assistance in New Zealand, 2019 (forecast) 35
Gross written premiums and policy numbers for travel insurance and assistance in New Zealand, 2019 (forecast) (table) 36

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