In Key Note’s latest Market Report, Travel Insurance 2015, the UK market for travel insurance is examined in terms of gross written premiums, number of policies and claims incurred. Both the value and volume of policies are divided into single-trip and annual multi-trip policies. The overall industry trend is downwards, with volume and value down by more than a fifth in the 5 years to 2014, even as the number of visits abroad by UK residents topped 60 million in 2014 — a record high.
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So why hasn’t the travel insurance industry benefitted from this trend? Well, there are a number of reasons, not least the rise of the annual multi-trip policy, often sold as part of a packaged bank account. This lets people go abroad as many times as they like in a year while only having bought one policy. Most UK residents’ visits are to Europe: greater awareness of the European Health Insurance Card (EHIC), which entitles a bearer resident in the European Economic Area (EEA) to the same level of treatment a local could enjoy from the state, has also played a part. Many mistakenly believe this is an adequate substitute for travel insurance, when the reality is that this is not always the case.
Of course, one of the key factors is the simple lack of people taking out travel insurance when they go abroad, despite the huge cost ramifications this might entail if they need medical care. Data in Travel Insurance 2015 reveal that 22% of people went abroad without travel insurance in 2014, up from 19% just a year before. However, for the youngest travellers, 35% of those aged 16 to 24 and 36% of those aged 25 to 34 said that they did not take out insurance.
Around one in four people aged 16 to 34 also said that they thought the EHIC meant they didn’t need insurance, while around one in five thought the UK government would foot the bill if they fell ill overseas.
Sun, Sea and Sensible Precautions
There are always risks when travelling abroad. For Britons, the principle risk would appear to be skin unaccustomed to blue skies and sunshine broiling a deep, lobster red and some seriously dodgy tan lines that you’ll nonetheless want to flaunt as proof that you do actually remember what the sun looks like.
Yet unfortunate events do happen while abroad. Wherever such an event is placed on the scale, from your luggage vanishing into the fourth dimension to a serious illness or injury, travel insurers’ sole aim is to be there to pick up the pieces. With the cost of travel insurance getting ever-more competitive due to the rise of price comparison websites (PCWs), more travellers should let insurers do just that.
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