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Travel Insurance and Assistance in the Asia-Pacific Region investigates the market for stand-alone travel insurance and assistance in ten countries, namely, China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand. This market is estimated by Finaccord to have been worth USD 2 billion in gross written premiums in 2015 and is growing rapidly in a number of the countries researched. Moreover, the competitive and distribution dynamics of the market continue to evolve with new channels emerging and partnerships with major distributors subject to regular change.

The study comprises the following unique features:

- data spanning 2011 to 2015 for the underlying travel market in each country with segmentations by type of journey (between holiday and business trips) and by destination (for the most recent year available);

- data for the size of the market for stand-alone travel insurance in each country 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 1,350 actual and potential distributors of stand-alone travel policies including airlines, banks, coach / ferry / railway operators, insurance brands and specialised lenders, plus both traditional and online travel trade entities;

- a review of other direct and affinity distribution channels used in each country 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 gross premiums for the top ten underwriters of this type of cover in 2015 in each country and for the top 15 groups across all ten countries combined 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 each country in terms of premiums and policies, with the same segmentations as those specified above for the period from 2011 to 2015.

The report is accompanied by an Excel PartnerBASE™ dataset that details the travel insurance partnerships identified, plus a 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 Asia-Pacific Region
Outbound travel from this region has grown rapidly in recent years… 2
The majority of trips are to other destinations in the Asia-Pacific region . 2
Between 2011 and 2015, the value of the region's travel insurance market rose by around USD 500 million . 4
The largest two markets in the region account for close to two thirds of travel insurance premiums 4
Hong Kong features both the highest number of trips per capita and the highest proportion of annual policies . 4
AIG is likely to enjoy a clear lead over its rivals as the region's foremost underwriter of travel insurance… . 5
… with no other competitor likely to hold a regional market share of more than 10% 6
Some insurers are active across multiple countries and others in just one . 6
Foreign trips are expected to rise up to 2019 in all but one of the countries researched… 7
…and China's travel insurance market likely to expand the most rapidly . 7
What is this report about? 10
Rationale . 10
This report builds upon Finaccord's previous ground-breaking studies of this topic . 10
Methodology . 11
Primary research . 11
The survey includes over 1,350 travel trade, transportation and financial organisations… 11
Market data . 13
External sources . 13
Travel insurance and assistance: how it all fits together 14
The term 'travel insurance' can refer to protection from a heterogeneous range of risks… . 14
.and assistance companies play a fundamental role in the global travel insurance industry . 15
Definitions . 15
Terms and abbreviations 15
Types of packaged travel insurance and assistance 16
Operating models . 16
Weighted shares . 17
Currencies, exchange rates and inflation 17
PartnerBASE 18
Finaccord 18
Introduction . 19
Underlying foreign travel markets 19
Number of trips 19
Across the region as a whole, overseas trips topped 250 million for the first time in 2015… . 19
… with mainland China and Hong Kong by far the largest source markets 19
There is most scope for trips per capita to grow in India and Indonesia . 21
Residents' wealth does not necessarily reflect their outbound travel habits . 23
Purpose of trips . 25
Destination of trips 29
Markets for travel insurance and assistance 31
Policy numbers and value of premiums 31
Across the region as a whole, premiums for stand-alone travel cover were worth some USD 2 billion in 2015 . 31
China and Japan are by far the largest travel insurance markets among the ten investigated… 33
… albeit the relatively small Indonesian market has seen the fastest growth in terms of policies… 33
…as well as premiums (in nominal if not real terms) 34
Awareness and use of annual policies is low but is likely to be rising steadily 36
Market metrics . 39
Premiums per capita are highest by far in Hong Kong and Singapore . 39
Taiwan and Japan feature the highest number of policies per trip… 43
…with Japan also having the highest average policy prices 43
Distribution through travel trade, transportation and financial organisations 46
Provision rates 46
Travel agents / tour operators: a majority of these organisations offer travel cover in every country . 46
Online travel specialists: travel insurance is available from over half of entities in this category… 47
Airlines: schemes through this channel are relatively widespread, with one notable exception. 48
Ferry operators: these represent a very limited distribution channel . 50
Railway operators: a half of the countries surveyed featured partnerships in this category . 51
Coach operators: travel insurance is rarely available through this channel 52
Banking organisations: the enthusiasm of banks varies markedly from one country to another . 53
Insurance brands: a clear majority of insurance brands sell travel cover in all countries apart from Japan 54
Specialised card providers and lenders: this channel is likely to be significant in certain countries . 55
Operating models . 56
The majority of stand-alone travel insurance schemes involve a single external underwriter 56
Competitive landscape . 59
On an unweighted basis, Japan and South Korea host the most concentrated markets in the region… 59
…whereas that of China is relatively fragmented . 59
When viewed in weighted terms, the markets of most countries appear more concentrated… 61
… although Malaysia, Singapore and Thailand are exceptions to this general rule . 62
AIG holds the most distribution partnerships in the region, followed by Chubb and Allianz… . 63
… and then by three Japan-based groups . 64
Leading competitors . 65
Only AIG is likely to hold a regional market share of premiums of more than 10%. . 65
… with the market fragmenting quite rapidly thereafter… 66
… between other international groups and ones focused on a single country . 66
Groups outside of the top 15 make up between 30% and 40% of the total regional market value 67
Forecasts 68
Underlying foreign travel markets 68
The total number of overseas trips is on track to surge further by 2019… 68
Markets for travel insurance and assistance . 70
…driving healthy growth in the region's market for stand-alone travel insurance… . 70
… especially in China, India and Indonesia 70
3.0 CHINA 74
Introduction . 74
Underlying foreign travel market . 74
Leisure trips have been growing almost six times as quickly as business trips in recent years . 74
Over one third of overnight trips are to either Hong Kong or Macao . 76
Market for travel insurance and assistance 76
In real terms, travel insurance premiums have been rising almost as fast as trips abroad… 76
… with annual policies outpacing single-trip policies. . 77
Travel cover bought for domestic trips accounts for a significant share of premiums 77
Distribution through travel trade, transportation and financial organisations 79
Summary of organisations researched 79
Provision rates 80
Over a half of potential distributors in China actually do promote stand-alone travel cover . 80
Operating models . 81
Most distribution partnerships are arranged via a single external underwriter… 81
… albeit there are also several notable examples of captive or joint venture providers . 82
Competitor share of partnerships - travel trade entities . 85
China Life, CPIC and Ping An Insurance hold the most travel trade partnerships… 85
…followed (in descending order) by China Insurance, AIG, Allianz China, AXATP and PICC… 85
…and then by a long tail of other providers… 85
… causing the supply structure in this distribution channel to be relatively fragmented . 85
CPIC claims the highest weighted share of partnerships in this field 86
Competitor share of partnerships - transportation organisations 88
The captive insurer of China Railway holds the most distribution partnerships in this sector. 88
Air Union Insurance Brokers acts as travel insurance intermediary to a number of airlines… . 88
… causing it to feature prominently in the weighted analysis of partnerships . 88
Competitor share of partnerships - financial organisations . 90
Only three insurers have more than one distribution arrangement in the financial sector… 90
… while many focus purely on selling on a direct basis as brands in their own right 90
China Life and Ping An Insurance are ranked first and second respectively in the weighted analysis 92
Travel insurance and assistance linked to payment cards and bank accounts 92
Other distribution channels 94
Automotive clubs . 94
Direct distribution by specialist travel insurers . 94
Online aggregators and brokers 94
At least eight insurance comparison sites in China promote travel cover… . 94
Other online brands 94
… and several major Chinese brokers have tied partnerships for this product . 94
Retailers 95
Numerous travel insurance providers distribute travel policies through Tmall.com… 95
… and one significant supermarket is also active in this field 95
Other types of distributor 95
China Mobile allows subscribers to acquire and pay for a form of travel cover by phone 95
Leading competitors . 95
Three leading competitors are likely to account for around a half of all premiums… . 95
…with two others potentially holding a market share of up to 10% . 96
Several non-indigenous insurers and joint ventures also feature among the top ten underwriters 96
Forecasts 98
Underlying foreign travel market 98
Slower growth in the Chinese economy as a whole will also cause trip growth to diminish… . 98
Market for travel insurance and assistance . 100
… albeit the value of the travel insurance market will continue to rise at a comparatively rapid rate . 100
4.0 HONG KONG 102
Introduction . 102
Underlying foreign travel market . 102
Between 2011 and 2015, holiday trips grew but business trips declined 102
The vast majority of trips out of Hong Kong are (unsurprisingly) to mainland China… 104
… with most focused on Shenzhen and other parts of the province of Guangdong 104
Market for travel insurance and assistance 105
Travel insurance policy sales have slightly outgrown the number of outbound trips… 105
… with annual policies constituting a significant part of the market . 105
Annual policies tend to be notably more expensive than their single-trip equivalents 105
Distribution through travel trade, transportation and financial organisations 107
Summary of organisations researched 107
Provision rates 108
Travel insurance is commonly available from a variety of distributor types in Hong Kong… . 108
Operating models . 109
… with most initiatives arranged in conjunction with a single, external underwriter 109
Competitor share of partnerships - travel trade entities . 112
Blue Cross (Asia-Pacific) and Zurich claim the most distribution relationships in this field… . 112
…with a diverse range of other insurers also working with travel trade partners 112
Zurich scores highly in the weighted analysis as a result of several significant partnerships . 112
Competitor share of partnerships - transportation organisations 114
AIG and Chubb are the most active underwriters in the transportation category… 114
…with one claiming a weighted share of partnerships of 57.5% . 114
Competitor share of partnerships - financial organisations . 116
A high number of underwriters operate in the financial sector… . 116
…many of which have only one external distribution partnership (or none at all) . 116
In spite of the fragmented supply structure, AXA claims a high weighted share of partnerships . 116
Travel insurance and assistance linked to payment cards and bank accounts 118
Other distribution channels 120
Automotive clubs . 120
The Hong Kong Automobile Association is a distributor of travel cover underwritten by Zurich 120
Direct distribution by specialist travel insurers . 120
Online specialists active in Hong Kong include Columbus Direct and World Nomads… . 120
Online aggregators and brokers 120
… and travel cover can also be acquired online from a variety of comparison sites 120
Brokers and insurance agents are the most significant distributors of travel insurance . 121
Retailers 121
Other types of distributor 121
Travelex represents an additional distribution channel for travel insurance policies in Hong Kong . 121
Leading competitors . 121
Only the two market leaders are likely to hold a market share of premiums in excess of 10%. . 121
.although other insurers claim significant shares of a notably fragmented market . 122
Forecasts 124
Underlying foreign travel market 124
Steady growth in holiday trips is predicted up to 2019… . 124
Market for travel insurance and assistance . 126
… and the value of travel insurance sales is expected to advance at a real compound annual rate of 3.6% . 126

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