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ITIC AMERICASCANADA’S GROWING & EVOLVING

SENIORS TRAVEL MARKET

David RedekopPrincipal Research Associate, The Conference Board of Canada

March 18, 2014

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• Size & growth of Canadian outbound leisure travel market with Snowbird emphasis

• Aging population influences travel decisions

• The opportunities for insurers

• Travel insurance channels, mobile, premiums

Speaking Points

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More Seniors than children by

2017 – first time in historyNumber of Canadians ≤14 and 65+ by year

Sources: Statistics Canada and CBoC calculations

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Source: Statistics Canada.

Canada’s Declining Fertility Rate(Crude birth rate per 1,000 females)

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• 260 thousand immigrants a year

• 50% from Asia/Pacific region in 2012

• 22% from Africa & Middle East

• Only 10% from Europe including the UK

• In 1941, 98% of immigrants were from Europe

First generation more likely to visit home country/area than travel to US.

Canada Depends on Immigration for Population Growth

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Canada’s Aging Population(% growth in population by age group between 2012 and 2031)

Source: CBoC calculation from Statistics Canada projections.

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65+ MAJOR TRAVEL MARKET

GOING FORWARD(% change between 2012 and 2030 in total outbound pleasure trips)

If Canadians aged 65+ make the same ratio of outbound pleasure trips in 2030 that they made in 2012, then outbound pleasure trips would grow by 95% for the 65+ age group by 2030.

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Canada: Total Outbound leisure trips(‘000 of outbound leisure trips, all destinations)

GlobalRecession

SARS

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Canada: US to recapture trip share(% share outbound leisure trips)

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Outbound Leisure Travel: Average

Annual Rate of Growth 2013 - 2017

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% Change in Snowbird Trips vs. Total

Outbound Leisure Trips

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Source: Statistics Canada.

2012 vs. 1998

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Non-US Snowbird Trips Growing at

Faster Rate than to US‘000 of trips Snowbird trips

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Canadian Snowbird Trips to US vs. Non-US

212,300

332,614

207,100

238,055

2012 2015 2018 2021 2024

65+ non-US

55-64 non- US

Source: The Conference Board of Canada. Statistics Canada for trips in 2012 31+ nights.

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24%

4%

15%

25%

7%

21%

4%

18%

2%

16%

11%

4%

38%

13%

Did not think about it

Not convenient enough

Going for a night or two

Too expensive

Forgot about getting it

Other reasons

Not sure

55+

<55

% Covered by Private Insurance Last Trip Reasons Why not Covered

Source: The Conference Board of Canada Travel Intentions Survey April 2013.

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46%

20%

27%

1%

2%

3%

40%

30%

23%

4%

3%

1%

In person

By telephone

Online

By mail

Combination

Not Sure

55+

<55

Where Purchased Insurance How Purchased Insurance

Source: The Conference Board of Canada Travel Intentions Survey April 2013.

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View on Buying Travel

Insurance Using Cell PhoneType of Travel Insurance Used

Source: The Conference Board of Canada travel intentions survey April 2013.

50%

25%

22%

3%

30%

23%

38%

9%

VeryComfortable/Comfortable

Somewhat comfortable

Not at all comfortable

Not sure

55+

<55

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Snowbird Premiums($ Millions of individual trip & annual/multi-trip premiums)

$105 $114

$170 $174

$213$235

$223$242

$265

2006 2007 2008 2009 2010 2011 2012 2013e 2014f 17

Source: The Conference Board of Canada based on survey of major travel insurers.

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• Canadian snowbirds 65+ are 2.7 times as likely to travel to the US for their snowbird trip versus to another destination.

• Canadian snowbirds 55-64 are only 1.4 times as likely to travel to the US for their snowbird trip versus to another destination.

• The willingness of the 55-64 snowbirds to travel to a non-US destination for their annual snowbird trip, will tend to slow the rate of growth in 65+ snowbird trips to the US as the 55-64 age group move into the 65+ age cohort.

More US Snowbird Trips as Population Ages

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Source: Statistics Canada 2000-2012. The Conference Board of Canada for 2013 estimate and 2014 forecast.

Number of Snowbird Trips each year(‘000 of outbound trips 31+ nights aged 55+)

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• Aging population a positive for travel insurers – more travel and more likely to purchase insurance.

• US will grow in importance as a destination over the next 20 years for insurers.

• Snowbirds are increasingly comfortable with buying travel insurance online but travel agent and personal contact remains important.

• Mobile option most important for short-trip auto travel to the US.

Wrap-up

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