Challenger banks could stimulate growth in the travel insurance market

The UK travel insurance market saw gross written premiums fall considerably in 2018, dropping by 11% to £548.2m ($671.3m). AXA’s latest partnerships with innovators in the banking industry could help spur growth at a time when the market needs it most, allowing the insurer to reach new customers.

AXA Partners recently announced a partnership with leading challenger bank Monzo. The partnership will result in AXA Partners underwriting a policy that covers medical bills, lost valuables, trip cancellation costs, and winter sports for Monzo Plus account holders. Individuals with a Monzo account are able to use their card whilst abroad without facing foreign exchange fees, making it an ideal challenger bank to partner with for travel insurance. AXA Partners also provides travel insurance for premium customers of banking platform Curve, which consolidates multiple cards and accounts into one smart card.

Findings from GlobalData’s 2018 UK Insurance Consumer Survey indicate that 11.9% of individuals have travel insurance provided through their bank account, highlighting that the banking channel is already well established. Yet this share could grow further. GlobalData estimates that AXA was the second-largest underwriter in the UK travel insurance market in 2018 with a 10.7% share of the market. Clearly partnering with such a significant player in the travel insurance market highlights the continuing importance of the banking channel in the distribution of policies.

The Association of British Travel Agents found that in 2017, 40% of 18–24 year olds were not purchasing travel insurance when travelling abroad. Partnerships with challenger banks, whose customer base is typically comprised of younger people, will provide AXA with an opportunity to engage with a demographic who is not buying travel insurance through existing channels.