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Travel Insurance and Assistance in North and Latin America investigates the market for stand-alone travel insurance and assistance in six countries, namely, Argentina, Brazil, Canada, Chile, Mexico and the US.

This market is estimated by Finaccord to have been worth USD 4.67 billion in gross written premiums in 2013 having increased by almost USD 1.40 billion since 2009. 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.

For the research, Finaccord investigated the distribution partnerships of 810 travel trade, transportation and financial organisations across the region; it also analysed systematically the involvement in travel insurance in each country of other key distributor categories, namely automotive clubs, direct sales, online aggregators and brokers, other online brands, and retailers.

The report is accompanied by an Excel PartnerBASE™ dataset that details the travel insurance partnerships of each of the travel trade, transportation and financial organisations covered, plus a convenient market data annexe, also in Excel format.

Key findings from the executive summary include:

- the number of foreign trips (lasting one night or more) across the six countries in North and Latin America increased from 121 million in 2009 to 139 million in 2013, which equates to a compound annual growth rate of 3.6% during this period;

- on average, annual policies accounted for 10.6% of all stand-alone travel cover sold during 2013, and annual policies are perceived to be most significant in Canada and least widespread in Mexico;

- across its various subsidiaries, ACE is the leading provider of travel insurance and assistance in North and Latin America, as measured by the number of partnerships held with travel trade, transportation and financial organisations, and it is active in all ten of the countries investigated;

- gross written premiums from stand-alone travel insurance and assistance in the ten countries are forecast to increase to USD 6.53 billion in 2016 which, after taking inflation into account, would represent an increase of 5.2% per year between 2012 and 2016.

Table Of Contents

Travel Insurance and Assistance in North and Latin America
0.0 EXECUTIVE SUMMARY 1
Outbound travel from this region as a whole has registered steady growth in recent years... 2
...and Argentina and Chile are both experiencing double-digit annual growth 2
Residents of Canada are the most frequent international travellers in the region 2
Most outbound travellers from these countries do not venture beyond the Americas 2
Regionally, gross written premiums have been rising at more than 6% per annum in real terms 3
Uptake of travel insurance is noticeably higher in North America than in Latin America... 5
...whereas average policy prices are very high in Argentina and Brazil compared to the US 5
Assistance cards are available from seemingly all travel agents in Latin America 5
The majority of stand-alone travel schemes involve a single external underwriter 5
Leading providers in this sector include ACE, AIG, Grupo IMAS and STARR 5
At a regional level, further strong growth is predicted up to 2017... 6
... although currency depreciation may affect the outcome in certain countries 7
1.0 INTRODUCTION 9
What is this report about? 9
Rationale 9
This report updates and expands upon Finaccord's previous ground-breaking research 9
Methodology 10
Primary research 10
The survey includes more than 800 travel trade, transportation and financial organisations… 10
…and draws on a separate analysis of travel benefits linked to more than 1,600 banking products 10
Market data 12
External sources 12
Travel insurance and assistance: how it all fits together 12
The term 'travel insurance' can refer to protection from a heterogeneous range of risks… 12
...and assistance companies play a fundamental role in the global travel insurance industry 13
Definitions 13
Terms and abbreviations 13
Types of packaged travel insurance and assistance 14
Operating models 14
Currencies, exchange rates and inflation 15
PartnerBASE and market data annexe 16
Finaccord 16
2.0 REGIONAL OVERVIEW 18
Introduction 18
Underlying foreign travel markets 18
Number of trips 18
Outbound travel from this region as a whole continues to develop at a steady rate 18
The mature US market is now relatively stagnant... 18
...whereas a number of Latin American countries are experiencing double-digit annual growth 18
In terms of the number of trips per capita, Canadians are the most frequent foreign travellers... 20
...but Argentina displays the strongest growth according to this measure 20
There is little correlation between citizens' wealth and their outbound travel habits... 22
...which can be partly explained by the prevailing modes of transport and choice of destination 22
Purpose of trips 24
Business trips account for the highest proportion of total trips in Argentina and Chile 24
Across much of Latin America, leisure travel is growing more quickly than business travel 24
TRAVEL INSURANCE AND ASSISTANCE IN NORTH AND LATIN AMERICA
II

Destination of trips 27
The Mexican and Canadian outbound markets are dominated by travel to the US... 27
...and the significance of intra-regional travel (as opposed to long-haul trips) is plainly apparent 27
Markets for travel insurance and assistance 30
Policy numbers and value of premiums 30
In real terms, gross written premiums in this region are increasing at more than 6% per annum 30
In absolute terms, the four Latin American markets are dwarfed by their two Northern counterparts 31
In two countries, estimated policy volumes are experiencing double-digit annual growth 31
...and insurance uptake continues to rise even in the already-mature US market 31
Of the six countries, Argentina's market is seeing the fastest real-terms growth in premiums 32
Consumers' awareness and use of annual policies is rising throughout the Americas... 34
...although annual cover can be very expensive in Latin American countries 34
Market metrics 36
On a per capita basis, Brazil generates the lowest premium values from stand-alone travel cover 36
Canada and the US register the highest number of policies per trip 40
Average policy prices are particularly high in Argentina and Brazil 40
Distribution through travel trade, transportation and financial organisations 43
Provision rates 43
Travel agents / tour operators: travel cover is available from almost all organisations researched 43
Online travel specialists: this distribution channel appears less developed in the US than in Canada 44
Airlines: provision is strongest in Canada (where 83% of airlines offer cover) and weakest in Argentina 45
Ferry operators: the majority of these entities do not actively distribute travel policies 46
Railway operators: Amtrak offers cover on bookings made in both the US and Canada 47
Banking organisations: distribution of stand-alone cover is strongest in Canada, followed by Chile 48
Specialised card providers: several Brazilian card issuers offer stand-alone travel policies 49
Operating models 50
The vast majority of stand-alone travel schemes involve a single external underwriter… 50
…although specialist intermediaries play a fairly significant role in the US market 50
Competitive landscape 53
Canada has the most concentrated stand-alone market in the region, followed by Argentina 53
At group level, ACE is the most common underwriting partner for stand-alone schemes… 55
…and other leading providers include AIG, Grupo IMAS and STARR 55
Distribution linked to payment cards and bank accounts 56
In most countries, individual elements of cover are far more common than comprehensive policies 56
Forecasts 59
Underlying foreign travel markets 59
A number of outbound travel sectors will exhibit strong growth between 2013 and 2017... 59
...although the number of travellers originating from the US will make little progress 59
Markets for travel insurance and assistance 60
At a regional level, policy volumes are forecast to rise at almost 5% per annum… 60
…and similar, real-terms increases in gross written premiums are expected up to 2017 60
Before possible future currency depreciation, the strongest growth is expected to occur in Argentina 61
3.0 ARGENTINA 64
Introduction 64
Underlying foreign travel market 64
Argentina's outbound travel market has continued to experience double-digit growth in recent years 64
...thanks largely to the strength of its holiday and VFR segments... 64
...although many of these trips are undertaken by road rather than by air (or sea) 64
Around three quarters of outbound travellers head to other countries in Latin America 66
Market for travel insurance and assistance 66
Insurance uptake is still relatively low amongst intra-regional travellers... 66
...although gross written premiums are growing quickly, in both nominal and real terms... 67
...notwithstanding Argentina's very high levels of consumer price inflation 67
TRAVEL INSURANCE AND ASSISTANCE IN NORTH AND LATIN AMERICA
III

Annual policies remain largely the preserve of frequent business travellers 67
Distribution through travel trade, transportation and financial organisations 69
Summary of organisations researched 69
Provision rates 69
Insurance availability is seemingly ubiquitous among travel agents, but fairly weak among airlines... 69
...and relatively few banks or similar organisations sell travel policies on a stand-alone basis 70
Operating models 70
The majority of distributors in Argentina choose to partner with a single, external provider 70
Competitor share of partnerships 72
Assist-Card and two brands belonging to Grupo IMAS have a very large number of travel trade distributors... 72
…and many providers benefit from national agreements with large travel agency networks 72
Other highly visible competitors in this area include APRIL and Assist-Med 73
Allianz Global Assistance distributes travel policies through a number of airlines 74
Only four providers sell stand-alone cover through banks or credit card companies 75
Travel insurance and assistance linked to payment cards and bank accounts 76
More than three quarters of credit card products feature one or more types of travel cover… 77
…but provision of the different types of policy varies between standard and premium products 77
Other distribution channels 78
Automotive clubs 78
Direct distribution by insurance underwriters 79
Many providers sell cover directly to consumers, although some notable underwriters do not 79
Online aggregators and brokers 79
There are a number of generic and travel-specific insurance aggregators in this market 79
Other online brands 79
AXA and Grupo IMAS each distribute travel cover through various online agents 79
Retailers 79
Several major retail brands are active indirectly via travel agency or financial subsidiaries 79
Other types of distributor 80
Forecasts 80
Underlying foreign travel market 80
The number of foreign holiday trips is expected to grow at more than 10% per annum up to 2017 80
Market for travel insurance and assistance 82
In real terms, premiums are likely to exhibit annual growth of around 12% in the coming years... 82
... although the projected US dollar market value is vulnerable to further local currency devaluation 82
4.0 BRAZIL 84
Introduction 84
Underlying foreign travel market 84
Brazil's outbound travel sector grew at around 7% per year between 2009 and 2013 84
Two destination countries jointly account for almost 40% of foreign trips undertaken by Brazilians 86
Market for travel insurance and assistance 86
Most travel insurance comes in the form of 'assistance cards' 86
In real terms, Brazil's travel insurance market is outpacing growth in the number of overseas trips... 87
…and an increasing proportion of travel policies take the form of annual or multi-trip cover 87
Distribution through travel trade, transportation and financial organisations 88
Summary of organisations researched 88
Provision rates 89
Seemingly all traditional and online travel agents can offer insurance to their customers... 89
...whereas availability of stand-alone cover from banks is still relatively low 89
Operating models 90
A significant proportion of travel agents offer cover on behalf of two or more providers... 90
...whereas Banco do Brasil makes use of its joint venture underwriter in this context 90
TRAVEL INSURANCE AND ASSISTANCE IN NORTH AND LATIN AMERICA
IV

Competitor share of partnerships 92
Leading assistance card providers include Assist-Card, GTA and MIC Coris International... 92
...and Travel Ace Assistance benefits from a number of group-level travel trade partnerships 92
There are a large number of providers and underwriters working with Brazil's travel trade 93
Allianz Global Assistance claims the most partnerships with major airlines serving Brazil 94
More than half of banking organisations underwrite travel cover on a captive or joint venture basis... 95
...although there are also several external partners working with financial organisations 95
Travel insurance and assistance linked to payment cards and bank accounts 96
More than half of credit cards feature one or more elements of travel insurance cover… 97
…but provision of the individual types of policy varies greatly between standard and premium cards 97
Other distribution channels 98
Automotive clubs 98
Direct distribution by insurance underwriters 99
Numerous providers sell travel cover directly to consumers, whereas some large underwriters do not 99
Online aggregators and brokers 99
Both generic and travel-specific aggregators play an active role in Brazil 99
Other online brands 99
Among others, AXA and SulAmerica distribute travel cover through separate online brands 99
Retailers 99
A number of retailers incorporate travel agencies, and therefore sell travel insurance 99
Other types of distributor 100
Forecasts 100
Underlying foreign travel market 100
Robust growth in the number of foreign holiday trips is expected to persist 100
Market for travel insurance and assistance 101
In nominal terms, premiums are likely to exhibit annual growth of more than 15% 101
5.0 CANADA 103
Introduction 103
Underlying foreign travel market 103
Canada's outbound travel sector has continued to grow quite rapidly in recent years 103
The US is by far the most common destination, accounting for around 70% of foreign trips 105
Market for travel insurance and assistance 105
In real terms, Canada's travel insurance market is growing at more than 8% per annum… 105
...and annual or multi-trip policies represent a fairly significant segment of this market 106
Distribution through travel trade, transportation and financial organisations 107
Summary of organisations researched 107
Provision rates 108
Policies are available from the vast majority of travel agents, and from a number of leading airlines 108
Around half of Canada's banks - including each of the Big Five - offer stand-alone travel cover 108
Operating models 109
The vast majority of distributors in Canada choose to partner with a single, external underwriter... 109
...although some banks make use of captive insurance companies, and one works with a broker 110
Competitor share of partnerships 111
Three Canadian insurers account for more than 80% of schemes operated by the travel trade 111
Manulife benefits from a group-level partnership with the Globus family of brands... 112
... and stands to benefit hugely from a deal struck with RBC Insurance during 2013 112
Allianz Global Assistance appears to focus on partnering with online travel specialists 112
Allianz Global Assistance, RBC Insurance and Manulife each partner with a number of airlines... 113
...and the policies available through British Airways have a more complicated supply structure 113
Manulife and TIC are the most common partners for financial organisations selling stand-alone cover... 114
...although the research identified a large number of captive and external providers in this area 115
TRAVEL INSURANCE AND ASSISTANCE IN NORTH AND LATIN AMERICA
V

Travel insurance and assistance linked to payment cards and bank accounts 115
More than 35% of credit card products feature comprehensive travel cover… 116
…but provision of the different types of travel cover varies between standard and premium cards 116
Other distribution channels 117
Automotive clubs 117
Two automotive clubs have formed a new insurance company specialising in travel cover 117
Direct distribution by insurance underwriters 118
The majority of leading providers are equipped to sell travel policies directly to the consumer... 118
...although several prominent property and casualty insurers do not offer travel insurance 118
Online aggregators and brokers 118
Many of Canada's leading insurance aggregators compare travel insurance 118
Other online brands 119
Retailers 119
Travel policies are available from two of Canada's largest retail groups 119
Other types of distributor 119
The Canadian Snowbird Association is a very relevant affinity partner for travel insurance 119
Forecasts 119
Underlying foreign travel market 119
The number of foreign business trips is expected to grow at around 7% per annum 120
Market for travel insurance and assistance 121
In nominal terms, premiums are likely to exhibit annual growth of more than 9% in the coming years 121
6.0 CHILE 123
Introduction 123
Underlying foreign travel market 123
Chileans make around 3.5 million overnight trips each year, and that number is growing steadily... 123
...although road travel to immediately neighbouring countries remains significant 123
Argentina and Peru jointly account for more than two thirds of all foreign trips 125
Market for travel insurance and assistance 125
Travel insurance generally takes the form of 'assistance card' products 125
In real terms, Chile's travel insurance market is growing at more than 12% per year... 126
...and annual policies remain an expensive option largely reserved for business travellers 126
Distribution through travel trade, transportation and financial organisations 127
Summary of organisations researched 127
Provision rates 128
Virtually all travel trade entities offer insurance, whereas only a quarter of airlines do so... 128
...and the availability of stand-alone cover from banks is also relatively weak 128
Operating models 129
Almost 30% of distributors offer their customers a choice of two or more insurance providers... 129
Competitor share of partnerships 131
Travel Ace Assistance and Assist-Card are the two providers most used by the travel trade... 131
...although exclusive distribution agreements are fairly rare in this market 131
Other fairly visible providers in this area include APRIL, MOK Travel Assist and Universal Assistance 132
In the field of distribution via airlines, Travel Assist benefits from its relationship with the LATAM group 133
MAPFRE SegurViaje's stand-alone policies are available from three retail banks … 134
...and Banco Santander underwrites its travel policies via a joint venture with Zurich 134
Travel insurance and assistance linked to payment cards and bank accounts 135
More than 60% of credit card products feature one or more types of travel cover… 136
…and around a fifth of premium products feature comprehensive travel policies 136
Other distribution channels 137
Automotive clubs 137
Direct distribution by insurance underwriters 138
TRAVEL INSURANCE AND ASSISTANCE IN NORTH AND LATIN AMERICA
VI

Most of Chile's best-known travel assistance brands also sell direct to the consumer… 138
... as do most major non-life insurance underwriters 138
Online aggregators and brokers 138
Both home-grown and multinational aggregators are present in this market 138
Other online brands 138
Go! Travel Assistance and Pervolare operate a number of websites in Chile 138
Retailers 138
Several major retail brands are active indirectly via travel agency or financial subsidiaries 138
Other types of distributor 139
Forecasts 139
Underlying foreign travel market 139
Up to 2017, the number of foreign holiday trips is expected to grow at around 6.5% per annum 139
Market for travel insurance and assistance 141
In real terms, gross written premiums are expected to increase by more than 8% annually 141
7.0 MEXICO 143
Introduction 143
Underlying foreign travel market 143
Mexicans undertake around 16 million overnight trips each year, and that number is growing consistently... 143
...albeit road transport remains the primary means of travelling to the US 143
Trips to the US dominate Mexico's outbound sector, leaving little room for long-haul travel 145
Market for travel insurance and assistance 145
Uptake of travel insurance is relatively low amongst Mexicans heading to the US 145
In real terms, Mexico's stand-alone market is growing at around 6% per year... 146
...and the vast majority of these policies take the form of single-trip cover 146
Distribution through travel trade, transportation and financial organisations 147
Summary of organisations researched 147
Provision rates 148
Cover is seemingly available from all travel agents, plus a number of significant airlines... 148
...although very few banks or credit card companies promote stand-alone travel policies 148
Operating models 149
The vast majority of distributors in Mexico choose to partner with a single, external provider 149
Competitor share of partnerships 151
Four competitors account for more than three quarters of the schemes operated by the travel trade . 151
Assist-Card and MAPFRE each have a number of significant group-level distribution contracts 151
AIG and Allianz Global Assistance each claim partnerships with online travel specialists... 152
... with the latter company also strong as a provider of travel insurance to airlines 153
Two banking networks controlled by Banorte make use of the group's joint venture with Generali 154
Travel insurance and assistance linked to payment cards and bank accounts 155
Around three quarters of credit card products feature one or more forms of travel cover… 156
…and the provision of each type of travel benefit is higher among premium cards 156
Other distribution channels 157
Automotive clubs 157
Direct distribution by insurance underwriters 158
All of Mexico's leading travel assistance brands can sell directly to consumers... 158
...as do a handful of other underwriters 158
Online aggregators and brokers 158
Mexico hosts numerous aggregators dedicated to comparing travel insurance quotes... 158
Other online brands 158
...and other notable websites are operated by Go! Travel Assistance, Pervolare and Proventum 158
Retailers 159
Several major retail brands are active indirectly via travel agency or financial subsidiaries 159
TRAVEL INSURANCE AND ASSISTANCE IN NORTH AND LATIN AMERICA
VII

Other types of distributor 159
Several mobile operators act as intermediaries of travel insurance or assistance policies 159
Forecasts 159
Underlying foreign travel market 159
The relatively strong growth in Mexico's business travel sector is expected to continue 159
Market for travel insurance and assistance 161
In nominal terms, premiums are expected to exhibit nominal annual growth of more than 9% 161
8.0 USA 163
Introduction 163
Underlying foreign travel market 163
The US outbound travel sector has recovered from its pre-2012 troubles... 163
...and VFR trips represent an important part of the leisure travel segment 163
Land-based travel to Canada and Mexico is highly significant in this market... 165
...and the UK remains the most popular European destination 165
Market for travel insurance and assistance 166
In real terms, the US international travel insurance market is growing at around 3.3% per year… 166
…with cover for trip cancellation and interruption remaining the top priority for most consumers 166
Distribution through travel trade, transportation and financial organisations 167
Summary of organisations researched 167
Provision rates 168
Whilst more than 90% of mainstream travel agents and tour operators sell policies... 168
...the availability of stand-alone cover from US banks is extremely low 168
Operating models 169
The majority of distributors choose to partner with a single, external underwriter... 169
...although the use of brokers is also relatively common in this market 170
Competitor share of partnerships 171
Three providers, including Travel Guard, account for 70% of schemes operated by the travel trade 171
The policies of Allianz Global Assistance can be underwritten by two different insurers 172
Specialist brokers such as BerkelyCare and Travelex hold a number of key travel trade contracts 172
The majority of Trip Mate's programs are underwritten by the US Fire Insurance Company 172
Allianz Global Assistance and Travel Guard are the most common partners for airlines... 173
...although three other providers are also active in this sector 173
Very few underwriters distribute stand-alone travel cover via consumer-facing banks 174
Travel insurance and assistance linked to payment cards and bank accounts 175
Around two thirds of credit card products feature one or more types of travel cover… 176
…but provision of travel benefits is much higher in relation to premium payment card products 176
Other distribution channels 177
Sales via non-traditional distribution channels have increased rapidly in recent years 177
Automotive clubs 178
Travel cover is available from a significant number of the country's major automotive clubs 178
Direct distribution by insurance underwriters 178
Underwriters specialising in travel insurance often sell directly to customers... 178
... but the appetite among major multi-line insurers appears to be more muted 178
Online aggregators and brokers 179
There are a number of dedicated travel insurance comparison sites in the US 179
Other online brands 179
Policies promoted by TruTravel Insurance are underwritten by Nationwide 179
Retailers 179
Other types of distributor 179
One major US insurer's entire business is focused on a very large affinity group 179
Forecasts 180
Underlying foreign travel market 180
In the short-term, growth in outbound trips will relate largely to the recovering business travel sector . 180
Market for travel insurance and assistance 181
In nominal terms, premiums are likely to exhibit annual growth of around 4% between 2013 and 2017 181

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