The first ever Travel Insurance Market Survey, conducted on behalf of the U.S. Travel Insurance Association (UStiA), revealed that Americans spent more than $1 billion on travel insurance last year.
According to the survey, more than 17 million travelers purchased travel insurance policies from UStiA member companies last year; and more than 80% of these were per trip travel insurance plans that included coverage for trip cancellation. The survey also found that more Americans are buying travel insurance online, with online travel insurance sales virtually doubling from 2002 to 2004.
“The findings confirmed that more Americans are choosing to protect their travel investment with comprehensive travel insurance plans,” said Jonathan Ansell, UStiA president. He noted that UStiA members account for an estimated 90% of the U.S. market.
Founded in 2004, the UStiA is a national membership association of insurance carriers, third-party administrators and allied businesses involved in developing, administrating and marketing travel insurance and assistance. According to Ansell, the events of Sept. 11 created significant changes in the U.S. travel insurance industry.
“In the uncertain months following the terrorist attacks, travel insurance played a vital role in restoring travelers’ confidence. As a result, we have seen an unprecedented surge in the awareness of travel insurance. The UStiA estimates that 30% of leisure travelers taking cruises, air/tour vacations and international trips bought travel insurance in 2004. This is a significant increase from the estimated 8 to 10% of travelers buying travel insurance before 9/11.”
Other findings from the 2004 Travel Insurance Market Survey include:
* Travel agencies sell more than 35% of all travel insurance provided by UStiA members. Together, cruise lines and tour operators sell 40%. Other popular channels include online agencies, airlines, broker/aggregators and credit card companies.
* Consumers’ top misconceptions about travel insurance are that credit cards cover trip cancellation and that travel suppliers provide reimbursements to travelers who have to cancel trips.
* Americans are most likely to purchase travel insurance plans that include trip cancellation insurance when they are traveling internationally or on cruises.
The 2004 Travel Insurance Market Survey was conducted by Avalon Actuarial Consulting; an independent Canadian Actuarial and Benefit Consulting Firm with offices in Montreal and Toronto. The survey was designed to gather and disseminate market information to UStiA association members and the general public; and also create a benchmarking tool for future studies.
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