General Insurance Article - Annual travel insurance set to lead personal lines growth


Over the next 12 months, annual travel insurance will see the highest potential growth (+15%) of ten types of the most common, annually-purchased personal lines insurance products, according to new research undertaken for financial services customer insight platform, Smart Money People by Consumer Intelligence.

 The data is taken from the Insurance Uptake Score, a new bi-annual barometer of personal lines insurance purchasing decisions in the UK, based on consumer-reported likelihood to continue, purchase, increase, reduce, or cancel their cover.

 From highest to lowest growth, the Insurance Uptake Scores for ten personal lines insurance products are:
 • Travel insurance (annual): +15%
 • Health insurance: +14%
 • Home insurance - buildings: +13%
 • Life insurance: +10%
 • Motorbike insurance: +10%
 • Gadget insurance: +6%
 • Pet insurance: +6%
 • Home insurance - contents: +4%
 • Homes insurance - buildings and contents: +4%
 • Motor insurance: +3%

 Travel insurance growth
 The growth in annual travel insurance is primarily driven by a 17% increase in new purchases and a 6% growth in existing holders increasing cover - either by increasing the limits they are covered for or adding in optional cover/add-ons in equal measures.

 Out of ten types of insurance, annual travel insurance is the product where more people are looking to add optional cover/add-ons. Smart Money People believes this is reflective of more adventurous travel plans and activities and the need to tailor cover to personal requirements. It is also likely that post-covid, consumers now have a greater awareness of policy details and are demanding higher coverage levels for peace of mind.

 In the next 12 months, a quarter of existing annual travel insurance policyholders say they are likely to switch provider at renewal.

 Smart Money People CEO, Jacqueline Dewey said: “Many international borders were only fully opened in 2022, and even then, consumer travel habits had been seriously disrupted with many people hesitant to book multiple trips. This growth in annual travel insurance is reflective of a growing confidence and for many, a return to their normal calendar of travel.”

 Health insurance growth
 Consumer purchases of health insurance will also likely grow substantially (+14%) in the next 12 months. The factor most driving this growth is existing policyholders looking to enhance cover by increasing the limit on their policy. An ever-stretched NHS is causing those who can afford to pay for private health cover, to ensure their policy is sufficient to meet their needs.

 Propensity to switch provider
 On average, over three-quarters of personal lines insurance holders intend to stay with the same provider at renewal during the next 12 months, and a quarter (24%) will switch.

 Home, Pet, and Motor coverage levels
 One in seven (14%) of home insurance customers said that they would likely change their coverage in the next 12 months (9% by increasing their cover, 5% by reducing their cover). One in 10 (11%) of motor insurance customers say the same (7% by increasing cover, 5% by decreasing). Thirteen per cent of pet insurance customers predict they will change their level of cover (8% by increasing, 5% by decreasing).

 Of the consumers who intend to increase their home insurance coverage (all types) in the next 12 months, 63% predict they will increase the limits they are covered for and 26% say they will look to add additional cover/add-ons. Of the 7% of motor insurance who say they will increase their cover, 42% will increase limits and 40% will add additional cover/add-ons. Of the 8% of insured pet owners looking to enhance their policy, more are likely to increase limits (55%) than add additional cover/add-ons (32%).

 Ian Hughes, CEO of Consumer Intelligence, said: "In this fast-evolving insurance landscape, firms need to not only have a view of the here and now, but also of what’s on the horizon. With the resurgence in travel, and consumers' post-Covid appreciation of the importance of having adequate travel insurance, it's unsurprising that travel insurance take-up is set to grow. Whilst growth is looking likely for all personal lines insurance markets, as the cost-of-living crisis deepens, we could see consumer insurance buying behaviour adapt to survive - making it important for insurers to keep their finger on the pulse."
  

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