Travel and Tourism - Cyprus - August 2004

SUMMARY

Mintel European Travel Exposure is a diverse yet detailed collection ofreports examining the structure, size and dynamics of an industry experiencingconstant change. The series provides a continual assessment of the travelbusiness throughout Europe (and, when available, providing a global analysis),offering an invaluable guide to the issues affecting the sector. Exhaustiveprimary research from numerous specialist sources means that Mintel TravelExposure titles examine more than general questions, investigating individualtravel markets, each in a clear and concise manner, the research varying fromcountry to country to outline the differences in outlook across the world.

Whether you are a tour or hotel operator, tourist board, airline, businessschool, media agency or industry investor, our definitive research publicationsprovide a genuine means to get to grips with challenging and exciting markets.

TABLE OF CONTENTS

Introduction and Abbreviations

• Report contents
• Methodology
• Global information and research
• Consumer research
• ACORN

Abbreviations

Executive Summary

• Life-expectancy is on the increase
• Figure 1: Life-expectancy, by selected ages, 1981-2001
• Gilt rates are lowest for many years
• Figure 2: Consolidated stock average annual gilt yield, 1900-2003
• The number of occupational pension scheme members has grown rapidly over thelast decade
• Figure 3: Number of consumers with pension provision, 1993-2003
• DSF and tied agent sales fall to 7.6% in 2003
• Figure 4: Distribution of pension annuity sales, by value, 1998-2003
• BRS withdraws from the market
• New rules will allow dealing in all types of investments
• Figure 5: Alternative retirement strategies, June 2004

Definitions

• Definitions of the main annuity products

Market Factors

• The savings ratio is projected to increase
• Figure 6: PDI, expenditure and savings, at current prices, 1999-2009
• Property seems a better investment`
• Base rates begin to climb
• Figure 7: Bank of England base rate, January 1994-June 2004
• The stock market
• Figure 8: FTSE 100 index, January 1996-January 2004
• The gilts market
• Figure 9: Consolidated stock average annual gilt yield, 1900-2003
• Annuity rates will be kept low for the foreseeable future
• Figure 10: Expectation of life at 65 years of age, by gender (UK), 1901-2021
• Research group concludes "life-expectancy for some in retirement willincrease significantly"
• Mortality and the health of the nation
• Figure 11: Expectation of life at birth, by selected ages, 1981-2001
• Open Market Option
• A-day 6 April 2006
• Implications of A-day
• The impact of new triviality rules
• Company Law: Flexibility and Accessibility

Market Size

• Nearly 19 million people hold an occupational pension
• Figure 12: Pension provision of UK adult population, 1993-2003
• Average premium per policy exceeds £10k in 2003
• Figure 13: New individual pension business, by volume and value, 1998-2003
• Number of new retirees to rise
• Figure 14: Number of new retirees, 2001-10
• Over 355,000 new policies sold in 2003
• Figure 15: New pension annuities and income drawdown business, 1999-2003
• Sales of single premium policies decline
• Figure 16: Single premium individual life annuities, 1994-2003
• The value of pension annuity payments reached £3.2 billion in 2002
• Figure 17: Value of annuity payments, 1993-2002
• Is BTL a practical alternative to an annuity?
• Figure 18: Buy-to-let lending, 1999-2003
• BTL v annuities
• Equity release grows in appeal
• Figure 19: Total sales equity release products , 2002-03
• New premiums for long-term care reached £73 million in 2002
• Figure 20: Single premium point-of-need long-term care policies, 1995-2002

Key Players and Product Pricing

• The leading annuity providers
• Figure 21: Selected annuity providers, 2004
• Standard rates are lowering to compensate enhanced and impaired lives
• Figure 22: Level single life annuity rates, June 2004
• A fifth of married annuitants have a joint annuity policy
• Figure 23: Level joint life annuity rates, June 2004
• Inflationary effects will become a bigger issue for providers and consumers
• Figure 24: RPI single life annuity rates, June 2004
• The level of annuity rates going forward

Distribution

• IFAs could play a major role in advising annuitants about OMO
• Figure 25: Distribution of individual pension premiums, 2003
• IFAs accounted for more than 83% of total sales in 2003
• Figure 26: Distribution of pension annuity sales, by value, 1998-2003
• Removing those with low life expectancies would push the averagelife-expectancy up and the conventional annuity rate down
• There were around 15,000 new drawdown contracts last year
• Figure 27: Distribution of income drawdown sales, 1998-2003
• Internet distribution presents risks

The Consumer

• Nearly a fifth of consumers contribute to an employer pension
• Figure 28: UK pension contributions, June 2004
• Are pensions too expensive for young adults?
• Figure 29: UK pension contributions, by gender and age, June 2004
• ABs most likely to contribute to a pension scheme
• Figure 30: UK pension contributions, by socio-economic group and maritalstatus, June 2004
• Low income households least likely to hold a pension
• Figure 31: UK pension contributions, by gross annual household income, June2004
• Pension holders expect annuity providers to be online
• Figure 32: UK pension contributions, by new technology users and newspaperreadership, June 2004
• Providers consider retailers to offer in-store advice
• Figure 33: UK pension contributions, by supermarket usage, June 2004
• Those aged 45-54 more likely to choose a traditional annuity
• Figure 34: Pension fund conversion preference, by gender and age, June 2004
• ABs are more likely to favour index-linked products
• Figure 35: Pension fund conversion preference, by socio-economic group andmarital status, June 2004
• Providers who offer the clearest explanation of annuities will win business
• Figure 36: Pension fund conversion preference, by lifestage and newtechnology users, June 2004
• Heavy TV viewers are likely to favour guaranteed annual payments
• Figure 37: Pension fund conversion preference, by newspaper readership andcommercial TV viewing, June 2004
• Morrisons shoppers likely to favour a lump sum and guaranteed annual payment
• Figure 38: Pension fund conversion preference, by supermarket usage, June2004

The Future

• Exploiting the open market option
• Will A-day open up the market?
• Compulsory annuities will be scrapped under a Conservative government
• Interest rates
• Consumers wake up to work in retirement

Forecast

• Figure 39: Forecast of new pension annuities business, 2003-09
• Figure 40: Forecast of the average premium per policy, 2003-09
• Factors incorporated