The travel insurance market is becoming increasingly competitive, with a 9.5 per cent rise in the number of policies available, according to Defaqto.
The financial research company was surprised by the results, considering the fact that overseas travel has been in decline due to economic woes, rising unemployment, and a lower exchange rate.
UK residents took 16 per cent fewer trips abroad in 2009 compared to the previous year, as a result of cutting back on non-essential spending, explains Brian Brown, author of the travel report which discovered the figures.
This has had a particularly significant impact on the number of short overseas breaks that Brits take, he said, and the consequential decline in demand for travel insurance will have a knock on effect on travel insurance revenue for providers.
Mr Brown said: "The fall in the value of the Pound has not only made foreign travel more expensive for the consumer but has also increased the cost of claims that insurers have to pay overseas. We envisage that insurers are still in for a bumpy ride as they work to protect their business over the next couple of years."
Meanwhile, those consumers who can afford to travel will benefit from an increase in competition in the travel insurance market.
© Fair Investment Company Ltd