Signs of sunset?

September 30, 2010, 12:36 AM GMT+0

The need for comprehensive travel insurance has been highlighted this year by the Icelandic volcanic eruption (pictured) and the travel chaos that ensued. The plight of Britons without adequate coverage – often examined in gruesome detail by the press this summer – has meant that we are more wary of the need for better safeguards when going abroad.

  • Despite these developments, figures show that of all categories of insurance, annual travel policies are the most likely to have been cancelled in the last two years.
  • Of those who said they have cancelled an annual travel policy at some point in the past, two-thirds did so during the recession.
  • What is driving this surge in travel insurance cancellations?
  • A new insurance report from YouGov SixthSense shows that policy-holders are most likely to cite ‘coverage-related’ reasons (69 per cent) for policy cancellation
  • This is as opposed to cost (23 per cent), suggesting that they manage to achieve a comparable level of cover elsewhere.
  • This consumer behaviour could be attributed to the increased presence of current account providers in the travel insurance market.
  • Standalone policies ‘redundant’Current account providers increasingly include annual travel insurance as part of their packaged accounts, thereby making standalone travel policies redundant for their customers.
    • Of those who have annual trip travel insurance, 34 per cent own packaged accounts
    • Of those who opt for single trip travel insurance, only six per cent own a packaged account.
    Seizing upon the increased media focus on the issue of travel insurance, the level of coverage is destined to become a greater selling point for packaged accounts. This summer, Nationwide announced it was to revamp its FlexAccount, and now offers annual multi-trip European travel insurance to account customers aged up to 65, who fund it with at least £750 each month.This article also appears in City AM