The travel trade is maintaining its grip on the travel insurance market with 68% of all sales, according to new figures from analysts Mintel.
The report shows that the £576m travel insurance market is still driven by consumer inertia, with few customers taking the time to shop around for travel insurance deals.
And despite the raft of annual policies on the market, only 23% take advantage of the cost savings offered by annual cover.
The travel insurance market has been boosted in recent years by increased numbers of people travelling abroad – Britons took an estimated 55.5 million trips in 2000, 36 million of which were holidays.
But due to the increasing number of companies in the industry, there has been little growth as price competition has impacted on premium income.
“Some consumers will book their holiday and insurance at the same time, assuming that they are purchasing the brochure insurance, although they are actually buying the agent's product, with the substantial commission going to the high street retailer,” said Paul Davis, senior financial consultant at Misys.
But there are signs of the market share of the travel trade eroding – last year it held 68%, compared to 73% since 1998.
Other channels are gaining a greater share, with insurance companies now accounting for 16% of sales, the majority being with direct insurers over the phone.
There is still a large untapped potential market, with about 25% of 20 to 34-year-olds failing to take out cover for their trips.