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Travel Insurance and Assistance in Europe

  • August 2015
  • -
  • Finaccord
  • -
  • 603 pages

Travel Insurance and Assistance in Europe investigates the market for stand-alone travel insurance and assistance in 20 European countries, namely, Austria, Belgium the Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Turkey and the UK.

This market is estimated by Finaccord to have been worth EUR 3.86 billion in gross written premiums in 2014 and its value has proved to be resilient in spite of a challenging economic environment. 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 2010 to 2014 for the underlying travel market in each country with segmentations by destination (between EU countries, non-EU European countries, North America and the rest of the world) and by type of journey (between holiday and business trips);

- data for the size of the market for stand-alone travel insurance and assistance in each country between 2010 and 2014 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 3,630 actual and potential distributors of stand-alone travel policies including airlines, banks, 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 and assistance gross premiums for the top ten underwriters of this type of cover in 2014 in each country and across all 20 countries combined with these data points expressed as a percentage range (e.g. 5.0% to 7.5%);

- forecasts to 2018 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 2010 to 2014.

The report, which represents an update and expansion to previous Finaccord studies 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 Europe
00 EXECUTIVE SUMMARY 1
Trends in outbound foreign travel have been positive in recent years in most European countries… 2
although five markets remain in decline 2
Overseas trips made for business purposes are especially significant in certain countries 2
The UK accounts for almost 30% of the total European market value 4
… with some other markets notably large in spite of the small size of their population… 4
… and others seemingly under-developed for one reason or another 4
Annual policies have made least progress in Russia and Turkey 4
Two groups account for up to 30% of Europe's travel insurance market value… 5
… with no other group likely to command a market share of more than 8% 6
A number of the leading groups attain prominence through operations in just one country 7
Foreign trips are expected to rise up to 2018 in all but one of the countries researched… 7
… and Turkey's travel insurance market seems destined to expand the most rapidly 7
10 INTRODUCTION 11
What is this report about? 11
Rationale 11
This report builds upon Finaccord's previous ground-breaking studies of this topic 11
Methodology 12
Primary research 12
The survey covers 3,630 travel trade, transportation and financial organisations… 12
Market data 14
External sources 14
Travel insurance and assistance: how it all fits together 16
The term 'travel insurance' can refer to protection from a heterogeneous range of risks… 16
and assistance companies play a fundamental role in the European travel insurance industry 16
Definitions 17
Terms and abbreviations 17
Types of packaged travel insurance and assistance 17
Operating models 18
Weighted shares 18
Currencies, exchange rates and inflation 19
PartnerBASE 19
Finaccord 19
20 EUROPEAN OVERVIEW 21
Introduction 21
Underlying foreign travel markets 21
Number of trips 21
The number of foreign trips per annum has increased in most European countries 21
…with Poland, Romania and Switzerland experiencing the strongest growth 21
On a per capita basis, foreign travel is most common in the Nordic countries and Switzerland 23
There is a marked correlation between citizens' wealth and their outbound travel habits 25
Purpose of trips 27
In Poland, Portugal and Turkey, business travel is particularly important within the total 27
Annual trends in business travel tend to be more volatile than those for holiday travel 28
Destination of trips 32
Over 70% of foreign travel in Europe is to destinations within the EU… 32
…with travel outside of Europe most common among residents of Russia and Turkey 32

Markets for travel insurance and assistance 35
Policy numbers and value of premiums 35
In real terms, the value of Europe's travel insurance market has been rising gently 35
The UK is the largest market by a wide margin, more than twice the size of second-ranked Germany 35
The Dutch and Norwegian markets for travel insurance are larger than might be expected… 36
… while those of France and Sweden are comparatively small 36
Policy volumes have been increasing most significantly in Poland, Romania and Turkey 37
The travel insurance markets of both the Czech Republic and Italy have fallen back in recent years 38
Across Europe as a whole, annual policies account for just over a third of total policies 41
Market metrics 43
Across the 20 countries, premiums per capita vary from around EUR 045 to EUR 7150… 43
…with the most expensive travel policies sold in Norway and Finland 47
Distribution through travel trade, transportation and financial organisations 49
Provision rates 49
Travel agents / tour operators: though still high, provision rates have declined a little since 2012 49
Online travel specialists: the provision rate remains lower than through traditional travel organisations 50
Airlines: close to four in five airlines researched have an arrangement for distributing travel cover 52
Ferry operators: in terms of selling travel policies, ferry companies are much less active than airlines 53
Railway operators: most countries researched feature only one national railway operator 55
Insurance brands: in most countries, more than a half of major insurers sell stand-alone travel cover 56
Banking organisations: Turkish banks display the highest provision rate for stand-alone policies 57
Specialised card providers and lenders: these are less likely than regular banks to offer stand-alone cover 59
Operating models 60
The majority of travel insurance schemes involve a single external underwriter… 60
…although the use of alternative models is widespread in certain markets 60
Competitive landscape 62
On an unweighted basis, partnerships with distributors are most concentrated in Sweden and Austria… 62
… and least so in Russia and the UK 63
Weighting partnerships reveals a more fragmented European market overall 65
Subsidiaries of Allianz and Munich Re hold the highest number of distribution partnerships… 68
… although the top eight groups account for less than a half of all relationships identified 69
The potential exists to set up multi-country deals with some international travel groups 69
Leading competitors 70
Allianz and Munich Re also lead the way by market share of gross written premiums… 70
…in a diverse market including many other international and national competitors… 72
… with groups outside of the top 15 accounting for between 28% and 38% of the total market value 72
Forecasts 73
Underlying foreign travel markets 73
Europe's outbound travel sector is expected to grow at a modest rate between 2014 and 2018… 73
…although some individual markets will grow significantly 73
Markets for travel insurance and assistance 75
This dynamic will feed through to further progress in the travel insurance and assistance market… 75
… with its value across 20 countries likely to exceed EUR 45 billion by 2018 77
At the local level, the strongest growth (nominal and real) is expected to occur in Turkey 77
30 AUSTRIA 80
Introduction 80
Underlying foreign travel market 80
Business trips have tended to increase more quickly than holiday trips 80
Accession of Croatia to the EU in 2013 has caused a surge in the share of trips to EU countries 82
Market for travel insurance and assistance 83
The stand-alone travel insurance market has grown faster than the underlying travel market 83
…largely due to a probable rise in the share of annual policies 84
Distribution through travel trade, transportation and financial organisations 85

Summary of organisations researched 85
Provision rates 86
Almost two thirds of organisations researched are distributors of stand-alone travel cover 86
Operating models 87
A majority of travel insurance schemes are organised through a single, external underwriter 87
Competitor share of partnerships 89
Europäische Reiseversicherung claims over a third of travel trade distribution partnerships 89
…in a sector that appears relatively concentrated… 89
making it the channel leader in both unweighted and weighted terms 90
Allianz Global Assistance is the leader by number of partnerships in the transportation category 92
… although two competitors may hold a couple of the most important relationships 92
Europäische Reiseversicherung and UNIQA are particularly active in partnering with banks… 94
…with other insurers selling policies both directly and through partnerships with financial institutions 94
UNIQA and Wiener Städtische attain greater prominence in the weighted analysis for this category 94
Travel insurance and assistance linked to payment cards and bank accounts 96
Comprehensive travel insurance policies are very commonly packaged with Austrian payment cards 96
Other distribution channels 98
Automotive clubs 98
Both of Austria's main automotive clubs offer travel insurance to members 98
Direct distribution by specialist travel insurers 98
A number of specialist underwriters promote insurance directly to consumers 98
Online aggregators and brokers 98
Aggregator involvement in travel insurance is likely to have grown in recent years 98
Travel health cover from a variety of underwriters can be bought from Care Concept 98
Other online brands 99
Other online brands include both international specialists and ones restricted to Austria and Germany 99
Retailers 99
Major retailers distribute travel insurance through captive travel agencies rather than directly 99
Other types of distributor 99
Leading competitors 99
The eight leading travel insurers are likely to control between 95% and 99% of the market… 100
…and the top two for over 60%, even using the most conservative assumptions 100
AIG may be ranked as high as fifth in spite of the fact that it benefits from just one partnership 100
Germany-based competitors include ERV, HanseMerkur and VHV (via VAV) 100
Forecasts 102
Underlying foreign travel market 102
Austria's foreign travel market is likely to continue to expand between 2014 and 2018… 102
Market for travel insurance and assistance 104
… causing the associated travel insurance sector to also move up in value 104
40 BELGIUM 106
Introduction 106
Underlying foreign travel market 106
The number of business trips has been growing at almost four times the rate of the number of holiday trips 106
Belgian consumers have shown a slight tendency towards longer-haul travel in recent years 108
Market for travel insurance and assistance 109
The value of the Belgian travel insurance market grew consistently between 2010 and 2014… 109
…with annual policies accounting for an increasingly significant proportion of the total 109
Distribution through travel trade, transportation and financial organisations 111
Summary of organisations researched 111
Provision rates 112
Two thirds of the organisations researched are distributors of stand-alone travel cover 112

Operating models 113
Most distribution relationships are based around use of a single, external underwriter 113
Competitor share of partnerships 116
Two providers claim over a half of travel trade distribution partnerships 116
…with two others also fairly significant as providers in this field 116
In weighted terms, Allianz Global Assistance is likely to derive the most business in this channel 116
Allianz Global Assistance has the highest number of relationships in the transportation category 118
… although it is overtaken by two other providers in the weighted analysis of partnerships 118
Among financial organisations, Europ Assistance and Inter Partner Assistance hold the most deals… 120
… with four other providers named twice each… 120
… and another dozen once each in a fairly fragmented sector 120
AG Insurance, Ethias and KBC Assurances all become more visible in the weighted analysis 120
Travel insurance and assistance linked to payment cards and bank accounts 122
A significant proportion of Belgian payment cards feature some form of travel insurance 122
Other distribution channels 124
Automotive clubs 124
All four automotive clubs have a travel insurance proposition for their members 124
Direct distribution by specialist travel insurers 124
Several specialists promote travel insurance directly to consumers 124
Online aggregators and brokers 124
Several aggregators have begun intermediating travel cover… 124
… and brokers also constitute a viable distribution channel 124
Other online brands 125
Specialist online brands include Assudis, Protections Travel Insurance and World Nomads 125
Retailers 125
One major retailer offers travel insurance directly to its customers 125
Other types of distributor 125
Leading competitors 125
Two competitors may account for almost a half of the total market value between them… 125
… although as much as 25% may be dealt with by providers outside of the top six 127
Having bought the travel insurance portfolio of De Europese, MAPFRE is now a significant competitor… 127
… as is an insurer owned by Touring Club Belgium 128
Forecasts 128
Underlying foreign travel market 128
The foreign travel market in Belgium is likely to continue growing between 2014 and 2018… 128
Market for travel insurance and assistance 130
…resulting in modest growth in gross written premiums for travel insurance over the same period 130
50 CZECH REPUBLIC 132
Introduction 132
Underlying foreign travel market 132
Outbound travel from the Czech Republic hit a new low point in 2014… 132
…with business travel in particular having declined very significantly 132
Trips to other EU countries account for over 85% of total trips 134
Market for travel insurance and assistance 135
Falling trips abroad have produced a corresponding decline in the travel insurance market 135
Distribution through travel trade, transportation and financial organisations 137
Summary of organisations researched 137
Provision rates 138
The vast majority of organisations that could offer travel cover actually do so in practice 138
Operating models 139
A number of banks utilise their own captive underwriters for travel insurance 139

Competitor share of partnerships 142
One provider is the source of travel cover for over a third of travel trade entities researched… 142
…with four other firms each holding between five and seven partnerships… 142
…and the remaining seven between one and three 142
ERV Evropská Pojiš?ovna is dominant in the weighted analysis of travel trade partnerships 142
Six insurers benefit from at least one qualifying airline partnership… 144
…with AIG Europe the incumbent provider to Czech Airlines 144
In the financial sector, insurers hold between one and four distribution arrangements each 146
The weighted analysis broadly reflects the size of specific banks and insurance companies 146
Travel insurance and assistance linked to payment cards and bank accounts 148
Comprehensive travel cover is a common feature of credit cards in the Czech Republic 148
Other distribution channels 150
Automotive clubs 150
ÚAMK has begun marketing travel insurance to its members 150
Direct distribution by specialist travel insurers 150
Online aggregators and brokers 150
In spite of its limited size, the Czech Republic hosts a number of insurance comparison sites 150
Other online brands 150
Retailers 150
One retail brand has branched out into selling travel insurance… 150
Other types of distributor 150
… as has one mobile network operator 150
Leading competitors 151
Four competitors are likely to hold a market share in excess of 10% 151
… with the leading pair more or less equal by this measure 151
In total, there are more than 20 entities underwriting travel cover in the Czech Republic 151
Forecasts 153
Underlying foreign travel market 153
A more favourable economic outlook should bring about a resumption of growth in foreign travel… 153
Market for travel insurance and assistance 155
… which will bring about an improving picture in the travel insurance market 155
60 DENMARK 157
Introduction 157
Underlying foreign travel market 157
Outbound travel from Denmark has recovered strongly from a drop in 2012… 157
… with leisure trips slightly outpacing business trips 157
Danish consumers have increasingly headed for nearby EU destinations or to North America 159
Market for travel insurance and assistance 160
The value of the Danish travel insurance market grew between 2010 and 2014… 160
…with a marked shift towards annual policies 160
Danish citizens can no longer use their ‘sundhedskort' to cover medical costs in EEA countries 160
Distribution through travel trade, transportation and financial organisations 162
Summary of organisations researched 162
Provision rates 163
Over half of the organisations researched are distributors of stand-alone travel cover 163
Operating models 164
Organisations in Denmark generally partner exclusively with a single underwriter 164
Competitor share of partnerships 167
GIntroduction 183
Underlying foreign travel market 183
Weakening economies in both Finland and destination countries saw foreign trips fall in 2013 and 2014… 183
… although trips per capita still expanded at a healthy rate from 2010 to 2014… 183
…with longer-haul journeys apparently increasing in popularity 185
Market for travel insurance and assistance 186
Rising trip numbers have allowed for limited growth in the Finnish travel insurance sector… 186
… albeit a natural limit is imposed by the fact that this market is dominated by annual policies 186
Distribution through travel trade, transportation and financial organisations 188
Summary of organisations researched 188
Provision rates 189
Over 70% of the organisations researched are distributors of stand-alone travel cover 189
Operating models 190
A number of banks utilise their own captive underwriters for travel insurance 190
Competitor share of partnerships 193
Eurooppalainen is the dominant provider of travel insurance to travel trade distributors… 193
…with eight other providers holding one to three partnerships each in this sphere 193
In the weighted analysis, AIG Europe is ranked second in this distribution channel 193
AIG Europe is also prominent as a provider of travel insurance used by airlines serving Finland 195
In the financial sector, insurers have between one and three distribution arrangements each 197
The weighted analysis broadly reflects the size of specific banks and insurance companies 197
Travel insurance and assistance linked to payment cards and bank accounts 199
Comprehensive travel policies are a common feature of premium credit cards in Finland 199
Other distribution channels 201
Automotive clubs 201
Fennia provides travel insurance for members of two automotive clubs 201
Direct distribution by specialist travel insurers 201
The leading specialists also promote travel insurance directly to consumers 201
Online aggregators and brokers 201
Vertaafi has reduced its roster of travel insurance partners in recent years 201
Other online brands 201
Retailers 201
R-Kioski distributes single-trip travel cover sourced from Eurooppalainen 201
Other types of distributor 201
Several trade unions have organised travel insurance on behalf of their members 201
Leading competitors 202
Eurooppalainen remains the dominant competitor in the Finnish travel insurance market… 202
… although there are plenty of other providers… 202
… even if only three of these are likely to hold a market share in excess of 5% 204
Forecasts 204
Underlying foreign travel market 204
The outlook for the foreign travel market is partly dependent upon the economic outlook 204
Market for travel insurance and assistance 206
Gentle growth is forecast for the travel insurance market between 2014 and 2018 206
80 FRANCE 208
Introduction 208
Underlying foreign travel market 208
The number of overseas trips saw a gradual increase between 2010 and 2014 208
The share of trips to other EU countries within the total has risen in recent years 210
Market for travel insurance and assistance 211
The French market for stand-alone travel cover has grown in both volume and value terms 211
… with the former moving up partly as a result of a slight shift in favour of single-trip policies 212
Several factors cause the average price of a travel insurance policy in France to be relatively low 212
Distribution through travel trade, transportation and financial organisations 214
Summary of organisations researched 214
Provision rates 215
Just over a half of more than 250 organisations researched are distributors of stand-alone travel cover 215
Operating models 216
A significant minority of travel trade entities utilise a broker with or instead of a single external underwriter 216
Competitor share of partnerships 218
Mondial Assistance claims over a fifth of travel trade distribution partnerships 218
… and is followed in this sphere by Europ Assistance 218
Presence Assistance Tourisme has been independent again since the start of 2013 219
Numerous smaller competitors also distribute travel cover through the travel trade channel 219
Viewed in weighted terms, Europ Assistance is likely to be the leading provider 219
although airline partnerships make Mondial Assistance a leader in the transportation category 221
… followed by two providers with one major airline deal each 221
Most insurance brands in France that sell travel cover underwrite their own policies 223
although a few mutual insurers work with external providers 223
AXA's strength in the category of financial organisations is due to its own direct sales capability 223
Travel insurance and assistance linked to payment cards and bank accounts 225
Around three quarters of credit card products in France carry at least some form of travel cover 225
Other distribution channels 227
Automotive clubs 227
Automotive clubs are unlikely to be a particularly important channel for travel insurance distribution 227 TRAVEL

Direct distribution by specialist travel insurers 227
MAPFRE has been collaborating with L'Europeenne for several years 227
and is one of three specialists to sell directly in France 227
Online aggregators and brokers 227
The involvement of French aggregators in travel insurance remains limited 227
and two major players operate in this field as agents rather than as genuine comparison sites 228
The French market features a number of specialist travel insurance brokers 228
Other online brands 229
Two international intermediaries are also prominent in direct online distribution 229
Retailers 229
Retailers in France only sell travel insurance through their travel agency subsidiaries 229
Other types of distributor 229
Leading competitors 229
Two providers are likely to account for a combined market share of at least 40% 230
… with all but two others almost certainly falling below the 10% threshold 230
Forecasts 232
Underlying foreign travel market 232
France's foreign travel market is likely to move up gradually between 2014 and 2018… 232
Market for travel insurance and assistance 234
…fuelling further growth in the associated insurance and assistance market 234
ouda Rejseforsikring holds over a half of travel trade distribution partnerships 167
…with the remainder divided among only four other insurers 167
Two companies are likely to control around 85% of business passing through this channel 167

Seven providers have between one and three partnerships in the transportation category 169
… although one gaining in particular through its partnership with Scandinavian Airlines 169
Most Danish insurance brands underwrite their own travel cover… 171
… meaning that partnerships with financial institutions are mainly with banks and card issuers 171
In some cases, buying travel cover is only open to customers with a household insurance policy 171
Travel insurance and assistance linked to payment cards and bank accounts 173
Comprehensive travel cover is a very common feature of premium payment cards in Denmark 173
Other distribution channels 175
Automotive clubs 175
Direct distribution by specialist travel insurers 175
Several specialists promote travel insurance directly to consumers 175
Online aggregators and brokers 175
Aggregators are an increasingly important feature of the Danish market 175
Other online brands 176
Managing general agents such as Dansk Rejseforsikring and safeAway are increasingly prominent 176
Retailers 176
Other types of distributor 176
Leading competitors 177
Given that it is not especially large, the Danish travel insurance market is comparatively fragmented 177
… with a long tail of competitors challenging the traditional market leaders… 177
… including both large non-life insurers and specialist underwriters 179
Forecasts 180
Underlying foreign travel market 180
The foreign travel market in Denmark is likely to continue growing between 2014 and 2018… 180
Market for travel insurance and assistance 181
…resulting in steady growth in gross written premiums for travel insurance over the same period 181
70 FINLAND 183

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