A recent study, UK Insurance Market Essentials: Covid-19 Updates, shows that travel insurance gross written premium (GWP) could contract by 48.7 per cent.
However, the study also expects the contraction to be short-term and predicts strong GWP growth in 2021 and 2022, returning to normal levels in 2023.
Daniel Pearce, GlobalData Senior Insurance Analyst, said: “Trips abroad by UK residents have been largely on hold since the lockdown measures came into effect. Two-week quarantines periods for those entering the UK from almost all foreign countries will limit any hope of a recovery in the summer season.
“We do expect the market to return to growth in 2021 and 2022, with large GWP increases in both the years. A combination of an increase in the number of trips abroad and the loss of the European Health Insurance Card system will play a vital role.
“We expect to see the specialist advice provided by brokers become increasingly important. This is especially true within commercial insurance, where Covid-19 has highlighted the importance of understanding exactly what risks businesses are exposed to.”