Munich Re and Allianz are the market-leading groups in a fragmented market that is predicted to be worth EUR 4.54 billion by 2018
The value of the market for stand-alone travel insurance and assistance across 20 European countries was EUR 3.86 billion in 2014 in terms of gross written premiums and is forecast to rise to EUR 4.54 billion by 2018. The UK market is by far the most valuable as it was worth more than twice as much in 2014 as Germany, the next-largest country. However, in terms of travel insurance and assistance gross written premiums per capita, Norway can be identified as Europe’s most developed market albeit Poland’s has displayed the most rapid growth in real terms (i.e. after discounting for inflation). These are key findings from Finaccord’s new study titled Travel Insurance and Assistance in Europe which investigates the market for stand-alone travel insurance and assistance in 20 European countries.
“At 29.3% of the total market value in 2014, the UK alone accounted for almost a third of the European market for travel cover”, commented David Bowles, Consultant at Finaccord. “Reasons for this include the outright size of the UK population plus the fact that it scores relatively highly in three further areas: the frequency with which its residents travel abroad, the propensity that they show to take out travel insurance, and average policy prices. All but the last of these factors also apply to Germany but the market value there is reduced by the fact that the average price of a travel insurance policy is less than one third of that of the UK. This is because many of the policies bought by German travellers offer much less comprehensive cover.”
In terms of the growth of the value of their markets for travel insurance and assistance, Poland, Norway, Romania and Turkey have been growing most rapidly with compound annual growth rates of gross written premiums of 9.0%, 7.2%, 6.6% and 5.4%, respectively, between 2010 and 2014 when expressed in real terms (i.e. after discounting inflation). In contrast, the weakest performances came from the Czech Republic, Italy, Spain and the Netherlands where the value of travel cover fell in real terms in all cases (at respective compound annual rates of decline of 4.5%, 4.3%, 2.0% and 1.8%). Meanwhile, the large UK market edged up at an almost-imperceptible real compound annual rate of growth of just 0.1% over the same time frame.
“The fact that Norway’s market is ranked second for growth out of 20 countries is somewhat surprising given that Norwegian travellers already pay a vastly higher price for travel cover than their counterparts elsewhere in Europe”, continued David Bowles. “However, the number of policies sold there has also been increasing quite rapidly as a result of increasing outbound travel so the growth in market value cannot be attributed purely to rising prices.”
On the basis of its research, Finaccord has also computed approximate market shares of the leading underwriters of stand-alone travel insurance not only in each of the 20 countries reviewed but also across them combined. This combined analysis indicates that Munich Re, mainly via subsidiary ERV (Europäische Reiseversicherung), and Allianz, primarily through assistance arm Allianz Global Assistance, are likely to be the market-leading groups with Europe-wide shares of gross written premiums of between 11% and 15% in the former case, and between 10% and 14% in the latter case. However, the fairly fragmented state of this sector is illustrated by the fact that groups outside of the top 15 (numbering more than 260 in total) may well command between 28% and 38% of the total market value.