Travel insurance is an unlikely product for the Post Office to provide when considering its illustrious royal heritage. Given that the origins extend as far back to 1516 when Henry VIII began using mail in an elemental form.
Much has developed since then, and a key change occurred in 1986 when the functions were broken in to letter deliveries, parcel deliveries, and most relevant for us; the retail arm which evolved to offer travel insurance.
The last decade has seen revenue growth thanks to the repositioning of the brand; less about postal services and much more as a financial services provider. Not only for travel, but other types of insurance products also.
So why is their product so popular with travellers, despite there being cheaper competing alternatives?
To answer that we first have to look at the behaviour of consumers. On the whole they do like familiarity and easy access. Whilst some may consider buying cover with an internet start up as risky, others are willing to vote with their wallets and go with the many cost effective online-only providers.
The Post Office has a trump card in that it is a time honoured institution which people are comfortable with. Plus, the thousands of physical branches make for a highly accessible outlet network.
A final consideration for popularity is the absolutely huge advertising spend! Smaller insurance companies simply cannot compete with this mega institution in terms of splattering the brand before us on a daily basis. However, this does not mean to declare that it is the best business model, since regular annual losses have been experienced year on year.
Further InformationPost Office Travel Insurance Review - Comprehensive look at the product in detail, including customer experiences and analysis of cover.
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