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Travel Insurance and Assistance in the USA

  • August 2016
  • -
  • Finaccord
  • -
  • 38 pages

Finaccord’s report titled Travel Insurance and Assistance in the USA is about the current status and likely future development of the market for stand-alone travel insurance policies in the US. 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 the US 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 over 270 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 the US 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 the US in 2016 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 the USA
0.0 EXECUTIVE SUMMARY . 1
1.0 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 over 270 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
2.0 MARKET ANALYSIS . 10
Introduction . 10
Underlying foreign travel market . 10
Growth in the number of outbound trips accelerated in 2014 and 2015… 10
. with business trips staging a recovery from the trough reached in 2013 . 10
Over a half of all overnight trips are to either Canada or Mexico… . 12
Market for travel insurance and assistance 13
The market has risen rapidly in terms of both premiums and policies in force 13
Annual, multi-trip policies represent a small but stable proportion of the total market 14
Distribution through travel trade, transportation and financial organisations 15
Summary of organisations researched 15
Provision rates 16
Well over a half of potential distributors in the US actually do promote stand-alone travel cover 16
Operating models . 17
Most distribution partnerships are arranged via a single external underwriter or multiple ones . 17
Several insurance brands distribute travel insurance as a white-labelled product 18
Competitor share of partnerships - travel trade entities . 20
Allianz Global Assistance and Travel Guard hold the most distribution relationships in this sector . 20
Transamerica is also significant, thanks to its links with Aon Affinity and Travelex Insurance Services… 20
…and a wide range of other insurers also involved in this diverse sector . 20
In weighted terms, two competing units potentially account for over a half of this market… 21
… buoyed in particular by relationships with major online travel firms and cruise companies . 21
Competitor share of partnerships - transportation organisations 23
Allianz Global Assistance and Travel Guard are most active in partnering with US airlines… 23
…although significant international airlines work with a wider range of insurers 23
One provider is dominant in the weighted analysis of partnerships . 23
Competitor share of partnerships - financial organisations . 25
Only two insurers have more than one distribution relationship among financial partners… . 25
… with Travel Insured International likely to hold the most significant one . 25
Travel insurance and assistance linked to payment cards and bank accounts 27
Around two thirds of credit card products feature one or more types of travel cover… 27
… rising to well over 80% in the case of premium products 28
Other distribution channels 29
Alternative distribution channels for travel cover are likely to be rising in importance in the US 29
Automotive clubs . 29
Automotive clubs constitute a major distribution channel for travel insurance 29
Direct distribution by specialist travel insurers . 30
The US market features a particularly high number of specialists selling policies directly… 30
…including some that focus on assistance packages . 31
Online aggregators and brokers 31
Travel insurance comparisons are available in the US from specialist brands . 31
Retailers 32
Costco operates a travel company for its members . 32
Other types of distributor 32
USAA distributes travel insurance to US military personnel and family members 32
Leading competitors . 32
Four competitors are likely to hold a share of 10% or more of the US market… 32
… with ones outside of the top ten holding between 11% and 20% when considered together 33
Forecasts 35
Underlying foreign travel market 35
Foreign trips will carry on growing up to 2019 although at a slower rate than in 2014 and 2015… . 35
Market for travel insurance and assistance . 37
… which means that the travel insurance market will continue to expand 37

LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY . 1
Key market data for travel insurance and assistance in the US, 2011, 2015 and 2019 2
1.0 INTRODUCTION 3
Travel insurance and assistance: how it all fits together 5
2.0 MARKET ANALYSIS . 10
Number of foreign trips undertaken by residents of the US, segmented by purpose of trip, 2011 to 2015 11
Number of foreign trips undertaken by residents of the US, segmented by purpose of trip, 2011 to 2015 (table) 11
Destinations of foreign trips undertaken by residents of the US, 2014 . 12
Gross written premiums and policy numbers for travel insurance and assistance in the US, 2011 to 2015 . 14
Gross written premiums and policy numbers for travel insurance and assistance in the US, 2011 to 2015 (table) 15
Summary of travel trade, transportation and financial organisations researched in the US, segmented by type, 2016 . 16
Provision rates for stand-alone travel insurance and assistance in the US, segmented by type of travel trade, transportation and financial organisation, 2016 . 17
Operating models used for stand-alone travel insurance and assistance in the US, segmented by type of travel trade, transportation and financial organisation, 2016 . 18
Operating models used for stand-alone travel insurance and assistance in the US, segmented by type of travel trade, transportation and financial organisation, 2016 (table) 19
Partnerships with travel trade organisations offering travel insurance and assistance in the US, 2016: weighted and unweighted competitor share . 22
Partnerships with transportation organisations offering travel insurance and assistance in the US, 2016: weighted and unweighted competitor share . 24
Partnerships with financial organisations offering travel insurance and assistance in the US, 2016: weighted and unweighted competitor share . 26
Provision rates for travel insurance and assistance linked to payment cards and bank accounts in the US segmented by product function and level, and by type of cover . 28
Individual competitors' estimated market shares of gross written premiums and other revenues for stand-alone travel insurance and assistance in the US, 2016 . 34
Individual competitors' estimated market shares of gross written premiums and other revenues for stand-alone travel insurance and assistance in the US, 2016 (table) . 35
Number of foreign trips undertaken by residents of the US, segmented by purpose of trip, 2019 (forecast) . 36
Number of foreign trips undertaken by residents of the US, segmented by purpose of trip, 2019 (forecast) (table) 36
Gross written premiums and policy numbers for travel insurance and assistance in the US, 2019 (forecast) . 37
Gross written premiums and policy numbers for travel insurance and assistance in the US, 2019 (forecast) (table) 38

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