Travel Insurance Observatory 2014

Transcription

1 Travel Insurance Observatory 2014 Research which contributes to excellence in the tourism experience

2 TRAVEL INSURANCE OBSERVATORY 2014 Acknowledgements The data on which this study is based comes from the health claims and outcomes database of MAPFRE ASISTENCIA and its subsidiary InsureandGo UK. The claims data is compared with statistics from two sources: Forward Data S.L. and its ForwardKeys.com database; and the Office for National Statistics (ONS), based on the ONS International Passenger Survey (IPS), which is the official source of statistics on UK inbound and outbound travel, and the UK Travel Trends reports for Disclaimer The analysis, interpretation and conclusions expressed in this report are based on data contained in the databases of MAPFRE ASISTENCIA and the UK ONS and do not reflect the views of any individual, organisation or institution. MAPFRE ASISTENCIA does not guarantee, and accepts no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency or completeness of any material contained in this document. Readers should seek appropriate independent professional advice prior to relying on, or entering into any commitment based on, material published here, which is published solely for reference purposes. Published and printed by: MAPFRE ASISTENCIA Carretera de Pozuelo, 52 Edif. 1 Anexo Majadahonda Madrid Spain Website: internationalsalesdepartment@mapfre.com Copyright 2014 MAPFRE S.A. All rights reserved. The contents of this report may be quoted, provided the source is given accurately and clearly. Distribution or reproduction in full or in part is permitted for own or internal use only. 2

3 TRAVEL INSURANCE OBSERVATORY 2014 Contents Foreword 4 Glossary 6 Key Highlights 7 Part 1 Trends Around the World Introduction Overview of World Trends Analysis by Source Region Europe Latin America Asia Pacific Leading Source Markets: UK, Spain and Brazil Analysis of Seasonality 31 Part 2 The UK Market Background and Methodology Types of Travel Insurance Cover Non-medical Claims Medical Claims Medical Claims by Destination Region Individual Country Analysis The Link between Age and Medical Problems Seasonality of Medical Claims 51 Appendices 55 3

4 Foreword Contributing to safe travel With increasing political and social unrest in different parts of the world, not to mention the outbreak of new and sometimes untreatable diseases such as the Ebola virus or even Avian flu, travellers are understandably more and more concerned about the risks they might incur for their safety and security when travelling. But while travel advisories from governments and intergovernmental bodies such as the World Health Organization play an important role in raising awareness among the public of many of the risks involved, there is not yet any regular health monitoring system in place that can be consulted by travellers and the tourism industry. Clearly, there is still a long way to go before a universally approved, reliable system can be put in place. But in the meantime, in an effort to provide a service of benefit to the public and industry stakeholders, MAPFRE ASISTENCIA has developed its Travel Insurance Observatory (TIO), based on its own in-house travel insurance research a comprehensive database of the claims filed by travel insurance customers of MAPFRE ASISTENCIA and its partners. This 2014 Travel Insurance Observatory, the second edition of what is intended to become an annual report, contains an overview of some of the key findings taken from MAPFRE ASISTENCIA's growing database of health claims and outcomes. Not only does it highlight the main medical problems suffered by travellers in different parts of the world, but it also clearly identifies the different reasons for the medical problems and complaints in other words, those that could have affected the tourists anywhere in the world and those that are related to specific destinations or travel experiences. The 2014 Travel Insurance Observatory The first MAPFRE ASISTENCIA Travel Insurance Observatory report, published in 2013, focused only on the UK market MAPFRE ASISTENCIA's largest travel insurance customer base and covered the period July 2012 to April This edition was presented at the 20th General Assembly of the United Nations World Tourism Organization (UNWTO) held in Zambia, Zimbabwe. This year's analysis monitors a full 12-month period, May 2013 to April 2014 (hereafter referred to as 2013/14). In this 2014 edition, we provide more in-depth coverage of the UK market, highlighting, as we did last year, the destinations in which most medical claims originated, as well as the type of medical complaint affecting UK travellers in the different destinations visited. In addition, we provide some comparisons with data for the same 12-month period of 2012/13, and we take a closer look at medical claims by age group and disease type, and also at seasonal trends which months of the year account for the most claims and where. 4

5 Part 1 contains new information on a number of other markets in Europe, the Americas and Asia Pacific in which MAPFRE ASISTENCIA travel insurance policies are sold. We hope you will find the information useful as well as interesting and that it will help lead to a better and broader understanding of the risks posed by particular types of travel experiences and destinations. Happy reading! 5

6 Glossary Medical Assistance Claims Medical Reimbursements Other Personal Benefits (OPB) EHIC GEA UTI DRD ONDRD TRAUMA Claims that involve immediate assistance from MAPFRE ASISTENCIA's call centres and/or hospitalisation of the insured (inpatients). Claims from MAPFRE ASISTENCIA's insured who need to pay for medical attention in the outpatients' department of a hospital or clinic, or at a doctor's, and who are reimbursed for these expenses after their trip. Non-medical claims related to travel cancellations and to the personal possessions of the insured (e.g. the loss of personal belongings, including computers, mobile phones, spectacles, cameras, etc., and the loss of travel and bank documents such as passports and credit cards. European Health Insurance Card, valid in all European Economic Area (EEA) member countries (including Switzerland). Gastro-intestinal infections. Urinary tract infections. Destination Related Diagnoses, such as allergies, animal and insect bites, infectious diseases (of both bacterial and viral origin), gastro-enteritis, diarrhoea (GEA) and abdominal pain, respiratory infections, urinary tract infections, dermatitis, conjunctivitis, altitude and decompression sickness, sunburn and other burns, etc. Other Non-Destination Related Diagnoses, including chronic illnesses, cardiovascular diseases, anaemia, tumours, epilepsy, etc. Trauma-related disorders, such as bone fractures, strains, etc. 6

7 Key Highlights First global Travel Insurance Observatory report The 2014 Travel Insurance Observatory (TIO) report, which is based on MAPFRE ASISTENCIA's database of travel insurance claims from around the world, is the first global report to be published by the company. It looks at medical claims submitted by tourists from several source countries in Europe, Latin America and Asia Pacific travelling around the world, with a particular focus on the destinations in which their claims originate. European tourists still favour travel insurance In mature markets such as Europe, where public health care is widely available, it is still very common for travellers to take out travel insurance, even though the European Health Insurance Card (EHIC) entitles tourists from EU and EEA-member countries to the same health care throughout the EU and EEA free of charge or at a subsidised cost. This is attributed to the fact that many Europeans prefer to have a back-up, just in case they encounter problems, such as for trips involving winter sports and other sports activities. The number of associated claims received by MAPFRE ASISTENCIA is also quite high higher than would normally be expected notably during the winter sports' season and with regard to claims originating in countries with mountain resorts such as France, Spain and Andorra. even for domestic travel Travel insurance is clearly less common for domestic trips, since most travellers are covered by either national or private health schemes in their own countries. But many travellers do have annual policies, or policies included with their package tours, and some still take out insurance for independent domestic trips as evidenced by the high share of domestic claims in some source markets. In the case of claims handled by MAPFRE ASISTENCIA, the domestic share ranges from as low as 1% in Germany, or virtually 0% in the UK, to 30% in China, 31% in Spain, 33% in France, 58% in Turkey and 61% in Australia. The pattern of claims is very much in line with travel flows The results of the 2014 TIO analysis show that the incidence and share of medical claims in different destinations and in different months of the year closely follow holiday destination and seasonal travel trends, since 75% of all travel insurance policies sold are for leisure trips. The seasonality of medical claims is, not surprisingly, influenced by peak holiday periods such as the ski season, and is affected by annual shifts in popular travel periods like Easter, as well as by special events. In Brazil, for example, the main domestic peak for claims falls in February, during Carnival. One example from the UK, which highlights the impact of different events, was the sharp decline in the share of claims originating in Egypt in July 2013, the month in which a coup d'état in the country caused a sharp drop in travel demand for the destination. 7

8 Trends in medical claims by age the case of the UK The destination shares of claims by age group, for which MAPFRE ASISTENCIA has detailed information in its database on the UK market, provide some interesting insights into the type of medical problems incurred in individual parts of the world, and by whom. In the majority of regions, the highest share of medical claims comes from those aged (find out more about age ranges in the body of this document) and, contrary to common perceptions, the 65-plus age group submits the lowest share. Nevertheless, as can be seen from the following chart, the medical reasons for these claims vary considerably across the three broad age group categories indicated. Among young travellers under the age of 25, the most frequent claims by a wide margin are those involving Destination Related Diagnoses (DRD) while, among seniors aged 65 years or older, there is a higher preponderance for claims relating to Non-Destination Related Diagnoses (ONDRD). MAPFRE ASISTENCIA claims from the UK, by age group and medical diagnosis (%), 2013/14 TRAUMA cases are most prevalent among year-olds and, indeed, specifically among those aged 50-65, as will be seen in the main report. The second chart looks at claims by different types of Destination Related Diagnoses (DRD) across the different age groups. Claims for gastro-enteritis 8

9 and intestinal problems (GEA) the most common cause of DRD worldwide are most prevalent among year-olds; young people (aged 0-24 years) and seniors aged 65 and over are more likely to suffer from other types of infections, according to the respective shares of claims. Skin problems, although much less widespread, are not so prevalent among the oldest age groups; as is the case with allergies, but animal and insect bites appear to account for similar shares of claims across the different age segments. MAPFRE ASISTENCIA claims from the UK, by age group and DRD type (%), 2013/14 Regions where most (health incidents giving rise to) medical claims originate The chart overleaf shows that almost half of all MAPFRE ASISTENCIA medical claims worldwide originate in Europe, followed by North America and Latin America. The shares of claims originating in other regions are relatively modest. If domestic claims are excluded from the calculations, Europe's share falls by eight percentage points, with most other regions showing slightly higher shares as a result, but the share of claims from Oceania and Africa remains small in line with the respective regions' shares of world travel flows. 9

10 MAPFRE ASISTENCIA medical claims by destination region total and excluding domestic claims, 2013/14 Domestic claims affect top destination country ranking The destinations in which the majority of MAPFRE ASISTENCIA claims take place, are Spain, the USA and Turkey. But if domestic claims are excluded, the top two rankings reverse, putting the USA in first place, ahead of Spain, and followed by Egypt in third place. The prominence of the USA and Spain is hardly surprising given their importance as international tourism destinations ranking second and third in UNWTO's world ranking in arrivals (after France). But the reason for Egypt's third position as discussed in some detail in Part 2 of this report is its relative importance in the UK market and the overall weighting of the UK market in total MAPFRE ASISTENCIA claims. Total MAPFRE ASISTENCIA medical claims by destination country, 2013/14 17% 16% 13% 7% 9% 8% 7% 6% 5% 4% Spain USA Turkey Egypt France USA Spain Egypt Turkey France Total (Including domestic) Total (excluding domestic) 10

11 Claims from the main source regions by travel destination In order to understand better the kind of medical problems that different source markets experience in different parts of the world, we carried out a comparative analysis of the three main source regions from which MAPFRE ASISTENCIA receives medical claims i.e. Europe, Latin America and Asia Pacific. As suspected, the findings reveal some interesting similarities as well as differences in terms of where the medical claims originate. As can be seen on the chart on the following page, the vast majority of European medical claims originate in Europe, followed by Latin America and North America, with the Middle East and Asia accounting for just a modest share. If domestic shares are excluded, the difference in shares of the top three destination regions is slightly less marked, but Europe still dominates. The top three regions combined account for some 78% of MAPFRE ASISTENCIA medical claims from Europeans, or 74% excluding domestic claims. For Latin Americans, the top three destination regions in which medical claims originate are North America, Europe and Latin America generating more than 90% of total claims between them, whether or not domestic claims are taken into account. In the case of markets from Asia Pacific, however, the overall picture changes somewhat when domestic claims are excluded from the count, due to the high share of domestic claims from Australians. The top three regions in which claims originate are Oceania, Asia and Europe or an 85% share of total claims from Asia Pacific between them and, in order of importance, Asia, Europe and North America, excluding domestic claims (87% combined). Top 3 destination regions where claims of European, Latin Americans and Asia Pacific travellers took place, 2013/14 11

12 Countries accounting for the highest shares of medical problems Looking at destination countries rather than regions, the highest shares of European claims originate in Spain, Turkey and the USA or, excluding domestic cases, in the USA, Egypt and Spain. A breakdown of Latin American medical claims shows that North America dominates the overall picture because it is such an important destination for Brazilians. Indeed, Brazil is the leading outbound market from the region, generating more than one third of all trips abroad in 2013/14, according to various national and international sources (see Appendix for details) about the same as its share for medical claims. Top 3 destination countries where Claims of European travellers took place, 2013/14 19% 9% 9% 11% 11% 9% Spain Turkey USA USA Egypt Spain Total (including domestic) Total (excluding domestic) Top 3 destination countries where Claims of Latin American travellers took place, 2013/14 34% 35% 9% 6% 10% 5% USA Spain Brazil USA Spain Argentina Total (including domestic) Total (excluding domestic) 12

13 Top 3 destination countries where Claims of Asia Pacific travellers took place, 2013/14 33% 16% 11% 8% 12% 10% Australia USA Thailand USA Thailand India Total (including domestic) Total (excluding domestic) Destinations: Spain Brazil Egy pt Turkey Australia Argentina USA Thailand India In Asia Pacific, MAPFRE ASISTENCIA is established in four countries in the travel insurance business Australia, China, India and the Philippines. Australia, the USA and Thailand are the destinations in which the largest shares of claims originate again due to Australia's high share of domestic claims in the overall count. Excluding domestic claims, the USA, Thailand and India feature in the top three rankings. 13

14 Looking Forward As MAPFRE ASISTENCIA's travel insurance business expands and moves into even more markets, both organically and by acquisition, the Travel Industry Observatory report is expected to develop into an increasingly reliable and valuable source of information on trends in this key segment affecting international travel and tourism. The travel insurance market is a particularly interesting one to study as it provides a mine of information relating to customer preferences and behaviour all extremely useful for the travel industry. By way of example and to whet your appetite for next year it is interesting to note that: In the UK, 1 in 4 travel insurance policies sold by MAPFRE ASISTENCIA is bought by a young person aged years old; the respective share in Australia is 33%. 4 in 10 of the medical claims received by MAPFRE ASISTENCIA from the UK market relate to trips of longer than 1 month abroad. According to market research: In the USA, 1 in 5 policies sold is to the 71-plus age group. In the UK, under-40s are increasingly purchasing their travel insurance online; but the majority of travellers still prefer call centres because of the personal contact, and 4 in 10 call centre sales are to the 60-plus age group. Mondays and Thursdays are the most popular days for buying travel insurance in the UK; but in Ireland, the preferred day is Tuesday (17.4%). Most online transactions take place after 21:00, while call centre bookings tend to be made from 10:00-12:00, except in Ireland when the most popular time is after 16:00. 14

15 Part 1 Trends Around the World 1.1 Introduction First insights from MAPFRE ASISTENCIA's medical claims database This is the first time that MAPFRE ASISTENCIA has opened up its worldwide database of travel insurance claims following the decision to share information of interest and, hopefully, of benefit to governments, the travel and tourism industry and the travelling public. Last year's Travel Insurance Observatory covered just the UK market, which is again a major topic of this 2014 report, in Part 2. Part 1 provides a first insight into trends around the world generally, in markets in which MAPFRE ASISTENCIA and its partners are established in the travel insurance sector. The report covers primarily the 12 months of May 2013 to April 2014 (hereafter referred to as 2013/14), although there is also some comparison with the same period of 2012/13 for those markets for which MAPFRE ASISTENCIA has adequate claims data for analysis. It should also be noted that the analysis covers only medical claims both for Medical Assistance (which involve assistance from MAPFRE ASISTENCIA and/or its partners / agencies, and may require hospitalisation or repatriation) and Reimbursements (of the costs incurred, for example, from a visit to a doctor or the outpatients department of a hospital or clinic). We have followed the definitions laid down by the World Tourism Organization (UNWTO) in terms of geographical regions, with one exception. This is the case of Mexico which, as a source market, displays travel patterns and behaviour much more in line with other Central and South American (Latin American) nations, rather than with its North American Free Trade Association (NAFTA) partners, the United States and Canada. Interestingly, this definition was also adopted by UNWTO for the purposes of its 2014 report on Key Latin American Outbound Travel Markets. Data sources The data contained in Part 1 of the 2014 Travel Insurance Observatory and which forms the basis of the report comes from MAPFRE ASISTENCIA's database of medical claims originating in different countries around the world. The report looks at the main source markets in terms of the share of total claims handled by MAPFRE ASISTENCIA, and the main destination regions and countries where the claims originated in 2013/14. The more detailed analysis of the Spanish and Brazilian markets, which is also interesting to compare with the UK (where the different variables permit this), also includes a comparison of seasonal flows. The different source markets relating to MAPFRE ASISTENCIA claims are: Europe: Belgium, France, Germany, Italy, Malta Portugal, Spain, Turkey and UK; Latin America: Argentina, Brazil, Colombia, Mexico and Uruguay; 15

16 Asia Pacific: Australia, China, India and the Philippines. Belgium, Italy, Malta, Mexico, India, the Philippines and China are included in the overall analysis, but are not identified individually in the report as source markets, due to their relatively small sample of cases, but they are of course included in the overall analysis of destinations where claims originate. The claims data is set against data from the ForwardKeys database of Forward Data S.L, as well as statistics from national tourism surveys with regard to outbound trips from Brazil, Spain and the UK, and the World Tourism Organization (UNWTO) for arrivals in different countries from those markets. 1.2 Overview of World Trends The following chart demonstrates clearly the dominance of the UK and Spain, in terms of share of the medical claims handled by MAPFRE ASISTENCIA in the 12 months May 2013 to April 2014 (2013/14). The top five source markets accounted for more than 80% of total claims. Breakdown of MAPFRE ASISTENCIA medical claims by source market, 2013/14 Relative importance of claims originating in domestic markets Travel insurance is clearly much less common for domestic trips, since most travellers are covered either by national or private heath schemes in their own countries. And this is also true for travellers from European Union (EU) or European Economic Area (EEA) countries (including Switzerland) travelling within the EU and EEA, as long as they carry the European Health Insurance Card (EHIC). If they do, they are entitled in theory, at least to free or subsidised health care. However, many travellers do take out domestic travel insurance for specific travel activities, such as winter sports or just to be on the safe side as the EHIC does not cover private health care. 16

17 It is important to look at domestic claims as they account for very different shares of MAPFRE ASISTENCIA medical claims from one market to another and can, therefore, distort the overall picture. Markets in which domestic claims strongly influence the overall shares include Turkey, Australia, Portugal, France and Spain. The relative share is particularly important in the case of Spain, which accounts for such a high share of claims overall, as seen in the previous chart. More importantly, the inclusion or exclusion of domestic claims has a marked impact on trends. With all claims included, the total number of MAPFRE ASISTENCIA claims increased by 9.3% in 2013/14 but only by 0.7% if domestic claims are excluded from the count. Share of domestic claims in total MAPFRE ASISTENCIA claims, for selected source markets, 2013/14 Europe dominates the destination shares, even without domestic claims The respective shares of the destination regions in which MAPFRE ASISTENCIA claims originate both with regard to total claims and excluding domestic claims are compared in the following table. As already discussed, Europe dominates in terms of share, followed by North and Latin America. MAPFRE ASISTENCIA medical claims, by destination region, 2013/14 (%) Destination including domestic excluding domestic Africa Asia Europe Latin America Middle East North America Oceania Worldwide

18 The overall picture for claims involving foreign travel can be seen more clearly in the following chart: Total MAPFRE ASISTENCIA medical claims by destination region (excluding domestic claims), 2013/14 Middle East 9% Africa 3% Oceania 4% Asia 9% Europe 41% Latin America 17% North America 17% Similarly, an analysis by individual destination country of claims from all source markets in which MAPFRE ASISTENCIA sells travel insurance shows that the largest shares of claims originate in Spain (26%), the USA (20%) and Turkey (11%). But if domestic claims are excluded, the top spots are held by the USA, Spain and Egypt, albeit with smaller shares overall as shown in the following chart. The prominence of the USA and Spain is hardly surprising given their importance as international tourism destinations ranking second and third in UNWTO's world ranking in arrivals (after France). 18

19 MAPFRE ASISTENCIA medical claims by destination (in which claims originate), excluding claims originating in domestic markets, 2013/14 USA 16% Spain Egypt Turkey France Mexico Thailand Australia Andorra Dominican Rep. 9% 8% 6% 5% 4% 3% 3% 2% 2% Others 43% The reason for Egypt's third position in the claims ranking as discussed in some detail in Part 2 of this report is its relative importance in the UK market and the overall weighting of the UK market in total MAPFRE ASISTENCIA claims. The presence of Andorra and the Dominican Republic can be attributed in large part to the popularity of these destinations from Spain and, in the case of the latter, also the UK. 1.3 Analysis by Source Region This section compares trends across the three main source regions Europe, Latin America and Asia Pacific Europe European source markets generate the most claims As already indicated, European source markets account for the largest share of medical claims handled by MAPFRE ASISTENCIA 49% in 2013/14, or 41% of all international claims (i.e. those originating in foreign countries for the respective source markets). More than half the claims from the region also stem from medical problems that occur in Europe. The UK, in first position in the source market ranking, generates the majority of all non-domestic claims, ahead of Spain with the two together accounting for a high 86% share between them. France, Germany and Portugal, each representing only very modest share, make up the top five. 19

20 Total MAPFRE ASISTENCIA medical claims (excluding domestic) from Europe, by source country, 2013/14 UK 52% Spain 34% France Germany Portugal Turkey Other 4% 4% 4% 1% 1% The following chart highlights the destination regions in which most European medical claims originate: Europe again predominating, ahead of Latin America, North America, the Middle East and Asia. Although this study only covers claims from MAPFRE ASISTENCIA, the volume of claims amply justifies the analysis. However, this breakdown is quite surprising on at least two counts. Latin America comes well down the list of most visited destinations from Europe, according to UNWTO and national statistics certainly some way behind North America and Asia, if not also the Middle East and Africa yet it accounts for 16% of medical claims, second only to Europe in share. Africa's 4% share, meanwhile, which one might expect to be higher, is in fact very much in line with the destination's share of overnight volume out of, say, the UK (5%), or share of trips from Spain (5%) 2013 results for MAPFRE ASISTENCIA's two most important European source markets. Total MAPFRE ASISTENCIA medical claims (excluding domestic) from Europe, by destination region, 2013/14 Oceania 4% Asia 8% Africa 4% Middle East 11% Europe 45% North America 12% Latin America 16% 20

21 By way of comparison, the next table shows the respective shares of destination regions in which European claims originate with and without domestic claims. Total MAPFRE ASISTENCIA claims from Europe by destination region, 2013/14 (%) Destination including domestic excluding domestic Africa Asia Europe Latin America Middle East North America Oceania Worldwide European claims relate to a broad spread of destinations On a country-by-country basis, the highest shares of European claims originate in Spain (19%), followed by Turkey and the USA (both accounting for 9%). Spain's top place, however, is due to the high share of claims from Spaniards travelling within their own country, and the same trend also affects Turkey's position in the overall ranking. If domestic claims are excluded from the count, the top three ranking changes to the USA, Egypt and Spain, with the full top ten (see below) highlighting the variety of destinations visited by Europeans, as reflected in UNWTO and national statistics. In these top ten destinations, three are in the Americas (USA, Mexico and the Dominican Republic), one is in Asia Pacific (Australia), one in the Middle East (Egypt), and just five in Europe (Spain, France, Turkey, Greece and Andorra). MAPFRE ASISTENCIA medical claims (excluding domestic) from Europe, by destination country, 2013/14 USA Egypt Spain Turkey France Mexico Andorra Dominican Rep. Australia Greece Others 11% 11% 9% 8% 5% 4% 3% 3% 3% 3% 41% 21

22 1.3.2 Latin America The majority of claims from Latin American markets are from Brazil MAPFRE ASISTENCIA's well-established travel insurance business in Brazil, coupled with the strong growth in both domestic and outbound travel demand from Brazilians, means that a majority of claims are generated from this country for domestic as well as international trips. Nevertheless, the growth over the past 12 months in claims from Latin American travellers has not come from Brazilians, but rather from Argentinians from a much lower base, of course and, to a lesser extent (in percentage terms), Uruguayans. MAPFRE ASISTENCIA medical claims (excluding domestic) from Latin America, by source country, 2013/14 Brazil Uruguay Colombia Argentina Mexico 1% 3% 22% 19% 55% Given Brazil's dominant share of claims, however, it is hardly surprising that the market heavily influences the shares of destinations in which claims originate. Indeed, as can be seen clearly in the following two charts (both of which exclude domestic cases), North America dominates the overall picture because it is such an important destination for Brazilians, attracting more than one third of all trips abroad in 2013/14, according to various national and international sources about the same as its share for medical claims. Europe ranked second and neighbouring Latin American countries third. MAPFRE ASISTENCIA medical claims (excluding domestic) from Latin America, by destination region, 2013/14 Oceania 4% Asia 3% Africa 1% Middle East 0% Latin America 25% North America 37% Europe 30% 22

23 With claims from Brazil taken out of the equation completely, the picture changes dramatically. Not surprisingly, since most of the less mature Latin American markets like Colombia and Uruguay travelled primarily within their own region in 2013/14 as they traditionally tend to do the share of claims originating in Latin America increased sharply, to 33%, ahead of that for Europe (with 28%) and North America (with 26%). Claims originating outside those three regions were relatively few and far between. MAPFRE ASISTENCIA medical claims (excluding domestic and Brazil) from Latin America, by destination region, 2013/14 Oceania 8% Asia 4% Middle East 0% Africa 0% North America 26% Latin America 33% Europe 28% 23

24 The following chart, which helps to substantiate the findings noted above, compares the share of Latin American claims by destination region the region where the claims originated (excluding domestic cases and all cases related to the Brazilian market) to that of inbound overnight volume from those countries. The chart shows just how important intraregional travel is for Latin Americans, since the region generates two thirds of all nights spent abroad (2013/14 data). Yet the share of medical claims originating in Latin America is only half that according to industry experts, most likely attributable to the fact that many Latin Americans do not bother to take out travel insurance on short trips to neighbouring countries. MAPFRE ASISTENCIA claims from Latin Americas vs. nights spent abroad in different destination regions, 2013/14 (%) Claims Nights 65,2 28,5 32,7 25,8 21,1 4,4 0,3 0,2 0,7 12,4 0,4 0,2 7,8 0,3 Africa Asia Europe Latin America Middle East North America Oceania Source region: Argentina,Colombia, Mexico and Uruguay (excludes Brazil). Finally, it is interesting to look more closely at the individual destination countries in which claims from Americas markets originate. Since domestic claims are relatively unimportant in terms of their share of total claims from Latin American markets their inclusion or exclusion makes little different to the overall breakdown. But, once again, we compare the shares with and without Brazil as a source market. In the case of the former, the USA stands out as the number one destination by a wide margin, accounting for more than one third of claims, followed by Spain and Argentina a 50% share for the three combined. When we exclude Brazil as a source market, the top three destinations the USA, Spain and Brazil are closer together in share and together account for a lower 44%. 24

25 % shares of destinations in which MAPFRE ASISTENCIA claims from Latin America originated, 2013/14 Destination including Brazil excluding Brazil as a source market as a source market USA Spain Argentina 5 6 France 4 3 Mexico 4 - Brazil 4 8 UK 3 5 Portugal 3 - Italy 3 2 Canada 3 4 New Zealand - 6 Peru - 2 Others Total Without the influence of Brazil, which we focus on as a source market later in this report, other perhaps surprising destinations emerge in the top ten New Zealand, accounting for a 6% share of claims, and Peru, with 2% Asia Pacific A fast-growing source region, with a high share of domestic claims MAPFRE ASISTENCIA is established in the Asia Pacific travel insurance market, selling policies in four countries Australia, China, India and the Philippines and its operations are already showing signs of rapid growth. Australia as a source market for medical claims has increased by more than 200% over the past 12 months in line with the market's overall growth and there has been a similar trend in Asia. A breakdown of medical claims by source country shows the strong dominance of Australia and China, but this is partly due to the fact that both markets have a very high share of domestic claims. The respective share of domestic claims in total claims is extremely modest in the case of India and the Philippines. MAPFRE ASISTENCIA claims from Asia Pacific, by source country, 2013/14 The high share of domestic claims from Australians also distorts the overall picture in terms of the breakdown of destinations in which MAPFRE 25

26 ASISTENCIA medical claims originate. In 2013/14, one third of all claims from the region originated in Australia, 11% in the USA and 8% in Thailand. However, if domestic cases are excluded from the destination analysis, in order to remove the bias in favour of Australia and, to a lesser extent, China, it can be seen that Asia still features very strongly as a source of claims for Asian policy-holders. But Europe follows closely behind, some way ahead of North America and Oceania Australia, New Zealand and the Pacific Islands. Only a modest share of claims originates in other regions of the world. MAPFRE ASISTENCIA claims (excluding domestic) from Asia Pacific, by destination region, 2013/14 North America 18% Oceania 7% Africa 2% Latin America 2% Middle East 1% Asia 40% Europe 30% The destination country breakdown of claims is quite diverse, reflecting the wide range of destinations visited. The USA and Thailand head the list, followed by Indonesia and Spain. MAPFRE ASISTENCIA medical claims from Asia Pacific by destination country, 2013/14 USA Thailand Indonesia Spain Germany New Zealand France Japan Canada UK 5% 4% 3% 3% 2% 2% 8% 10% 12% 16% Others 35% 26

27 1.4 Leading Source Markets: UK, Spain and Brazil Europe generates a high share of claims in all three markets As already discussed, the three most important source markets in 2013/14, in terms of the share of total medical claims handled by MAPFRE ASISTENCIA (excluding domestic cases), were the UK (31%), Spain (30%) and Brazil (9%). Domestic cases have been excluded from the comparison because they are far more important as a share of total claims for Spain than for the other two markets, which would distort the findings. The following graph compares the shares of claims originating in different destination regions for the three source markets. In the case of the UK and Spain, Europe accounts for the highest shares of claims, ahead of Latin America in the case of Spain, and the Middle East in the case of the UK. Travel destination preferences are naturally different for Brazil, because of its geographical location on a different continent and in the Southern Hemisphere but Europe is still important as a claims-originating region for the Brazilian market, albeit some way behind the USA in top spot. Given the pattern of travel flows from these three markets to destinations around the world, the share of claims would seem to be more or less in line with the importance of each destination region to the specific market. But among the anomalies, or surprise findings, of our comparative analysis is the low share of Asia in the case of the UK and the lower than expected share of Latin America in the case of Brazil. % shares of MAPFRE ASISTENCIA medical claims by destination region for the three leading markets Spain, UK and Brazil, excluding domestic claims, 2013/14 Brazil Spain UK Africa Asia Europe Latin America Middle East North America Oceania More differences than similarities between the three markets The UK is the subject of more detailed analysis in Part 2 of this report. But it is nevertheless interesting to highlight here some of the key findings of the UK analysis, so as to make direct comparisons with the other two markets, particularly with Spain, a sister European market. 27

28 % share of MAPFRE ASSISTENCIA claims from Spain, UK and Brazil in top 3 and top 10 destinations, 2013/14 Let us consider the top destination countries in which UK claims originated in 2013/14. The top three Egypt, Spain and Turkey accounted for 50% of total claims made by UK travel insurance policy-holders, while for Spain the respective share (of the top three foreign destinations: USA, Mexico and Andorra) was a mere 17%. Brazil's top three destinations (USA, Spain, Portugal) generated a 54% share, closer to that of the UK. In terms of the top ten shares, the differences were equally striking 80% in the case of the UK and 77% for Brazil, but just 36% for Spain. Where MAPFRE ASISTENCIA claims from the UK originated (excluding domestic), 2013/14 UK is Europe's second largest outbound travel market As Europe's second most important outbound travel market after Germany, the UK generates some 58.5 million trips abroad annually (2013), with 22% of total trips to, and 40% of overnights in, destinations outside Europe. This is a much higher share than the average for European markets. 28

29 Spain is the UK market's leading destination, ahead of France and the USA two other destinations also featuring high up the list in terms of claims. In 2013, Spain attracted 11.8 million British tourists who stayed an average of 9.2 nights per person, or a total of 108 million nights in the country. Turkey is also an increasingly popular choice for British holidaymakers, recording 1.4 million arrivals from the UK and 16.5 million overnights in Egypt, while not featuring among the UK's leading tourism destinations, is a favourite for year-round holiday travel, especially among those looking for some winter sunshine. Despite the continuing unrest and intermittent violence in Egypt since the start of the Arab Spring, UK demand for the destination has held up reasonably well, showing growth of more than 5% in overnight volume in 2013 to around 5 million overnights from more than 400,000 British tourists. But, as will be discussed later, the coup d'état in July 2013 did cause a sharp, if short-lived, decline. Spanish domestic travel booms but outbound still lags behind According to the 'Familitur' survey conducted by Spain's Instituto de Estudios Turísticos (IET), Spaniards took 156 million trips in Of these, 145 million, or 93%, were domestic. The high level of domestic travel demand is not surprising given the vast array of tourism attractions offered by Spain, not least for summer sun & beach vacations. And the importance of domestic travel is understandably reflected in the volume and share of Spanish medical claims originating in Spain. Where MAPFRE ASISTENCIA claims from Spain (excluding domestic) originated, 2013/14 USA Mexico Andorra France Dominican Rep. UK Italy Germany Peru China Others 8% 5% 5% 4% 3% 3% 2% 2% 2% 2% 64% The Spanish outbound travel market still lags somewhat behind that of its northern European neighbours, as well as France and Italy. But it is more adventurous than many other European markets, with 22% of its 11.2 million outbound travellers in 2013 heading to non-european destinations. The Americas attracted 1.2 million, Africa 1.0 million and Asia still the least developed non-european region in terms of demand in the Spanish market around 300,

30 This helps to explain why so many non-european countries feature among the top ten foreign destinations in which Spanish claims originate the USA, Mexico, the Dominican Republic, Peru and China. However, the absence of African destinations in the claims' breakdown is somewhat surprising. Andorra, in third place in terms of share of medical claims from Spain, is especially popular as a winter destination, as can be seen in the time series charts in the following sub-section. And France, in fourth place, is a popular city break destination for Spaniards, usually visited in the shoulder months in spring and autumn. Brazilians' strong bias towards the USA With 62% of all Brazilian outbound trips generated by the Americas and first and foremost by the USA it comes as no surprise to see that the USA accounts for such a high share of Brazilian medical claims abroad. It is also a year-round destination, although the highest shares of claims originate in the peak summer and winter travel months of January (14%) and July (11%). As already indicated, Europe generates 31% of all claims, spread across a number of countries, with Spain, Portugal and France being the most important. The trend also appears to be in line with outbound travel patterns from Brazil to Europe. Where MAPFRE ASISTENCIA claims from Brazil (excluding domestic) originated, 2013/14 USA Spain Portugal France Argentina Italy UK Canada Germany Mexico Others 6% 5% 5% 3% 3% 3% 3% 3% 2% 23% 43% By way of interest, Brazilians took 53 million trips in 2013 involving overnights in commercial accommodation i.e. excluding most VFR travel. Outbound travel intensity, or the share of the population who travel abroad, is still only 4%, but these 7.9 million Brazilians took 8.7 million outbound trips. 30

31 1.5 Analysis of Seasonality Valuable insights to be gained from seasonal flows The case of the UK is presented in more detail in Part 2 of this report but, at the risk of repetition, we would like to highlight some of the differences across the three markets for comparative purposes at least in terms of their respective monthly and seasonal shares of total medical claims. The case of Egypt has already been noted the dip in claims and travel during the month of July 2013 following the coup d'état but the graph also highlights the predominance of claims during the summer months, which account for at least two thirds of all British trips abroad. The stagnation in share of claims in March and April 2014 can in part be attributed to the timing of Easter, which fell in April in 2014, boosting travel demand during that month. Records from the UK Office of National Statistics show that, in spring 2013, domestic travel demand was strong, possibly at the expense of travel abroad, which might explain the apparent stagnation in share of claims. Monthly shares of MAPFRE ASISTENCIA medical claims from the UK, 2012/ / / /14 Average 16% 14% 12% 10% 8% 6% 4% 2% 0% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr The following chart highlights the monthly breakdown of claims among the top five destinations, in terms of share. As an example, Egypt accounted for its highest monthly share of UK claims in November, a favourite month for UK tourists, but one with a lower overall share as the chart above shows. Claims originating in Spain and the USA are fairly balanced in terms of share through the 12 months, highlighting the fact that they are year-round destinations. Turkey, on the other hand, accounts for a much higher share of UK claims in summer, in line with its high share of overnights from the UK. 31

32 Monthly % shares of MAPFRE ASISTENCIA claims from UK in top five destinations, 2013/14 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Egypt Spain Turkey USA France Others Total Seasonal claims patterns in line with travel flows While domestic claims in the UK are insignificant in number, and so do not really warrant detailed analysis, Spain presents a totally different picture. In the first graph, which looks at total travel for 2012/13 and 2013/14, the summer and spring months all show a higher than average share of claims. However, the shares for the months of January through March were quite a bit higher in 2013/14 likely due in part to the later Easter, but also because of increased winter sports travel to Andorra and domestic ski resorts. MAPFRE ASISTENCIA medical claims from Spain (total), 2012/ /14 (%) 2012/ /14 Average 16% 14% 12% 10% 8% 6% 4% 2% 0% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Domestic vs. international trends There is little difference in the overall trends regarding international claims, i.e. claims originating in foreign destinations, as can be seen from the following chart. 32

33 MAPFRE ASISTENCIA medical claims from Spain, excluding domestic, 2012/ / / /14 Average 16% 14% 12% 10% 8% 6% 4% 2% 0% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr In sharp contrast to the situation in the UK, and also Brazil (see below), the top five destinations in which claims originate from the Spanish market (2013/14 data) never account for more than 50% of all claims in any one month. And the average share for the year is around one third, or 33%. The 50% is only reached in the peak winter sports months of January and February when Andorra's share rises to 20% and 26%, respectively. The USA's monthly share of claims remains steady through the winter months at around 10%, but picks up to 13-14% in the peak Spanish summer travel season, at the expense of neighbouring destinations like Andorra and France. France is the favourite summer hot spot for several European nations. But not in the case of Spain, since the majority of Spaniards still take their main summer vacations in their own country. In the case of the Spanish market, as reflected by the respective shares of medical claims originating in France on a monthly basis, the destination is less popular in the peak travel season. But, as France's tourism industry has recognised for many years, demand from Spain which is pretty heavily concentrated on city trips and short breaks is much higher, relatively speaking, in the winter and shoulder months of the year. It therefore comes as no surprise to see France's monthly share of medical claims peak at 10% in the month of December and 9% in April. Monthly % shares of MAPFRE ASISTENCIA claims from Spain in top five destinations, 2013/14 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr USA Mexico Andorra France Dom. Rep Others Total

34 The monthly shares of domestic claims present a much more dramatic picture. The two seasonal peaks can be explained by Spaniards' enthusiasm for winter sports holidays, or at least mountain holidays, which tend to peak between February and Easter no doubt resulting in a rise in cases of TRAUMA, such as skiing fractures. Monthly shares of MAPFRE ASISTENCIA domestic claims in Spain, 2012/ /14 (%) 2012/ /14 Average 16% 14% 12% 10% 8% 6% 4% 2% 0% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr The August 2013 peak may be attributed to the upturn in Spain's economic situation at about that time, motivating Spaniards to go on holiday. Statistical trends from IET's Familitur database also point to a strong increase in domestic travel in 2013, which has continued into Brazil outbound travel and medical claims show the same annual peaks Seasonal patterns from Brazil, in terms of medical claims, show a peak during the main summer holidays, in January, but also during the winter. In 2013/14, the two peaks were equally important. MAPFRE ASISTENCIA medical claims from Brazil, excluding domestic, 2012/ /14 (%) 2012/ /14 Average 16% 14% 12% 10% 8% 6% 4% 2% 0% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 34