The report suggests that the gross written premiums (GWP) will contract by 48.7. Despite this, it expects it to be a “short-term hit” and forecasts strong GWP in 2021 and 2022. Subsequently, the growth should then return to more normal levels in 2023.
Daniel Pearce, senior insurance analyst at GlobalData, 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 EHIC system will play a vital role.”
The impact of Covid-19 is also expected to have a significant impact on the distribution of products. The affinity channel, in particular, is expected to see its share decline.
Pearce added: “The affinity channel’s prominence within the travel market will see its share of distribution fall, while we expect to see the specialist advice provided by brokers become increasingly important.