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2023

Australia and Canada Travel Insurance Market

Australia and Canada Travel Insurance Market Size, Share, Competitive Landscape and Trend Analysis Report, by Insurance Cover, by Distribution Channel, End User and Age Group : Opportunity Analysis and Industry Forecast, 2023-2032

BI : Insurance

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Author's: Pramod Borasi and Beesetty Yogendra | Onkar Sumant
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Australia and Canada Travel Insurance Market Statistics - 2032

The Australia and Canada travel insurance market was valued at $1,444.91 million in 2022, and is projected to reach $12,341.78 million by 2032, registering a CAGR of 24.0% from 2023 to 2032.

Travel insurance covers the expenses incurred and minimizes the risks during travel. It acts as a cushion in situations such as trip cancellation due to medical emergency, loss of baggage, evacuation due to medical condition or hijack, loss of travel documents, and others. The travel insurance providers are executing travel rules & regulations and developing their existing offering by implementing advanced technologies that addresses a variety of customized coverages in the market, which is expected to fuel the growth of the travel insurance market. This report features information on Australia and Canada travel insurance offered by key vendors. Furthermore, it highlights the strategies of key players to improve the market share and sustain competition.

Australia and Canada Travel Insurance Market Insights

Rise in travel by the baby boomer population along with their family or relatives creates the need for secure travel. Therefore, increase in demand for travel insurance among baby boomers drives the market growth. Furthermore, with increase in tourism, several incidences such as trip cancellations, loss of luggage & important documents, medical emergencies, and others take place. To mitigate these risks, consumers opt for travel insurance, which is a significant driving factor for the growth of the Australia and Canada travel insurance market. 

However, lack of awareness toward travel insurance policies in terms of coverages, premium rates, and low penetration level & fewer written policies of travel insurance in Australia and Canada limits the growth of the travel insurance market in Australia and Canada.

The report focuses on growth prospects, restraints, and analysis of the Australia and Canada travel insurance market trend. The study provides Porter’s five forces analysis to understand the impact of numerous factors, such as the bargaining power of suppliers, the competitive intensity of competitors, the threat of new entrants, the threat of substitutes, and the bargaining power of buyers on the Australia and Canada travel insurance market share.

Australia and Canada Travel Insurance Market
By Insurance Cover
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Single Trip Travel Insurance segment accounted for the highest market share in 2022.

Segment Review

The Australia and Canada travel insurance market is segmented on the basis of insurance cover, distribution channel, end user, and age group. By insurance cover, the market is segmented into single-trip travel insurance, annual multi-trip travel insurance, and long-stay travel insurance. By distribution channel, the market is segmented into insurance intermediaries, insurance companies, banks, insurance brokers, and insurance aggregators. On the basis of end user, it is segmented into senior citizens, education travelers, business travelers, family travelers, and others. On the basis of age group, it is divided into 1-17 Years Old, 18-30 Years Old, 31-49 Years Old, and Above 50. Country-wise, it is analyzed across Australia and Canada.

The key players profiled in the Australia and Canada travel insurance market analysis are Cover-More, Allianz Australia Limited, Suncorp Group, AIG Australia Ltd, Nib Travel Insurance Distribution Pty Limited, The Manufacturers Life Insurance Company, TD Insurance, RSA Travel Insurance Inc., Travel Guard and Blue Cross Canada. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

COVID-19 Impact Analysis

Travel & tourism industry has recorded continuous investments for its developments and has become a massive contributor to the economic growth. However, this industry has been largely affected due to the outbreak of the COVID-19 pandemic, leading to economic instability. In addition, tourism destinations followed complete ban on hotels , and restaurants, bars, tourist attractions, theme parks & museums negatively affected the growth of Australia and Canada travel insurance market . Furthermore, according to a study conducted by the World Travel and Tourism Council (WTTC) in 2021,  75 million jobs related to tourism & travel were at risk globally and will take nearly 10 months or a year for the industry to start recovering.

The WTTC estimates that the travel & tourism industry has been largely hit by pandemics and crises, among other industries. As it involves movement of people via air travel, which increases the risk of the spread of viruses at a much faster pace than normal and therefore, consistently fuels the spread of viruses across the countries. For instance, the Canada tourism industry, which employs around 3 million people, dropped nearly 42% of its employees. Conversely, factors such as restoring traveler confidence and lifting travel restrictions with complete measures in the travel & tourism sector are expected to provide lucrative opportunities for the Australia and Canada travel insurance market in the upcoming years.

Although the COVID-19 outbreak negatively impacted the growth of the market, the industry is expected to recover by the third quarter of 2020. This is attributed to increased awareness of travel insurance among individuals, essentials of insurance coverage, restarting of tourism places, and others, which is expected to provide numerous opportunities for the Australia and Canada travel insurance market in the upcoming years. In addition, many insurers adapted work from home policy for their employees to enhance connectivity with the client, and offer 24x7 support to the clients during the pandemic situation. For instance, according to a study conducted by Qantas in 2021, bookings for flights into Australia doubled on the first day after Australia announced the reopening of borders. In addition, there was a significant spike in the Canada tourism industry with March, April and May as the most popular months for travel. Thus, these are the major growth factors for travel insurers to sustain and stabilize their coverages in Australia and Canada.

Top Impacting Factors

Increase in Emergency and Medical Expenses

Various countries globally, with their expensive healthcare systems, have urged consumers to avail travel insurance as a prerequisite to protect themselves from the financial burden while traveling. In addition, to handle and financially cover medical services in case of an accident, injury or any other sudden event, travelers are largely adopting travel insurance in the Australia and Canada. In addition, when travelers experience unexpected illnesses or injuries abroad, they may require medical treatment or even emergency evacuation, which can be quite expensive. By availing travel insurance, consumers aim to ensure that they have coverage for these situations, reducing the potential burden on their healthcare systems and safeguarding the well-being of themselves, which in turn drives the growth of the market.

Australia and Canada Travel Insurance Market
By End User
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Family Travelers segment accounted for the highest market share in 2022.

New Technological Developments in Australia and Canada Travel Insurance Industry

The insurance industry has witnessed a paradigm shift in the recent years, as travel insurance providers in Australia and Canada are expanding their online presence through websites and mobile apps. These digital platforms offer customers the ability to research, compare, and purchase travel insurance policies conveniently. Moreover, travel insurance companies are implementing digital claims processing systems, allowing customers to submit and track their claims electronically. This streamlines the claims process, reduces paperwork, and accelerates claim settlements. Furthermore, increased technologies such as geo-location, application program interface (API), artificial intelligence (AI), data analytics, blockchain, and big data provide innovative opportunities for insurers in the market. With these technological developments, travel insurance distribution platforms are expected to enhance productivity for providing coverages seamlessly at the point-of-purchase.

Technological Trends

In both Australia and Canada, the travel insurance market is experiencing significant changes and technological trends that are reshaping the industry. These trends reflect the evolving needs and expectations of travelers, as well as the impact of digital innovation. The digitalization of the travel insurance industry is a prominent trend in both Australia and Canada. Travelers are able to purchase insurance policies online, compare options, and access their policy information through mobile apps and websites. This shift towards digital platforms enhances convenience for consumers and streamlines the insurance purchasing process. Moreover, advanced data analytics are being used to assess risk and personalize insurance offerings. Insurers in Australia and Canada are leveraging big data and machine learning to better understand customer behaviors, preferences, and travel patterns. This enables them to offer tailored insurance packages that meet individual needs and provide more accurate pricing. Furthermore, blockchain technology is gaining traction in the travel insurance sector to enhance transparency and streamline claims processing. By using blockchain, insurers can create immutable records of policies and claims, reducing fraud and improving the efficiency of claims settlement.

In addition, mobile apps and digital platforms are being integrated with real-time assistance features. Travelers can receive alerts, travel advisories, and emergency assistance through these apps, ensuring a smoother and safer travel experience. Some insurers are even incorporating location-based services to provide relevant information to policyholders during their trips. Moreover, Artificial intelligence (AI) chatbots are being deployed for customer service and support with which travelers can interact with chatbots to get instant answers to their insurance-related questions, file claims, and receive assistance 24/7, reducing the need for human intervention and improving response times.

Government Initiatives

The increase in government initiatives in Australia and Canada travel insurance market focusing on safeguarding the interests of travelers and ensuring fair practices within the industry is driving the growth of the market. In Australia, the establishment of the Travel Compensation Fund (TCF) acts as a safety net against financial losses due to the insolvency of licensed travel agents or tour operators. Additionally, stringent consumer protection laws ensure transparency in travel insurance policies, mandating clear information on coverage, exclusions, and claims procedures. The Australian government also responded to the COVID-19 pandemic by providing guidance on travel insurance coverage related to the virus and implementing temporary changes to visa arrangements and financial support for affected travelers. Regulatory bodies like the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) oversee compliance with financial and consumer protection regulations.

In Canada, some provinces require licensing for travel insurance providers, ensuring they meet minimum standards. Insurance agents and brokers are regulated to uphold ethical conduct and disclosure standards, and the Canadian government introduced COVID-19-related measures, including requirements for adequate health insurance coverage for travelers entering the country. Government agencies like the Financial Consumer Agency of Canada (FCAC) provide educational resources to help consumers understand travel insurance policies and make informed choices. While Canada's publicly funded healthcare system covers medical emergencies both domestically and abroad, travel insurance is often recommended for additional coverage. These government initiatives in Australia and Canada strike a balance between consumer protection and industry regulation, focusing on transparency, financial standards, and traveler support.

Australia and Canada Travel Insurance Market
By Country
2032
Australia 
Canada

Australia accounted for the highest market share in 2022.

End-User Adoption

In Australia, travel insurance adoption has been relatively high, driven by an awareness of the importance of coverage, especially for international travel. Travelers often seek comprehensive policies to safeguard against trip cancellations, medical emergencies, and unforeseen events. The government's emphasis on consumer protection and transparent policies has further encouraged adoption.

In Canada, travel insurance adoption has also been substantial, but it can vary among demographics. Many Canadians understand the value of coverage when traveling abroad, particularly for medical expenses. However, adoption may be influenced by factors such as age, destination, and the type of trip. Snowbirds and retirees, for instance, often prioritize comprehensive coverage for extended stays in warmer climates.

Both countries have seen increased interest in travel insurance amid the COVID-19 pandemic, as travelers recognize the importance of coverage related to trip cancellations, interruptions, and medical emergencies, including those associated with the virus. However, travelers are now more selective and cautious when choosing policies, seeking clarity on pandemic-related coverage. Furthermore, end-user adoption in the travel insurance market in Australia and Canada witnessing a growing awareness of the need for protection during domestic and international travel, driven by a combination of government initiatives, education, and changing travel dynamics.

Key Benefits for Stakeholders   

  • The study provides an in-depth analysis of the Australia and Canada travel insurance market forecast along with the current & future trends to explain the imminent investment pockets.
  • Information about key drivers, restraints, & opportunities and their impact analysis on Australia and Canada travel insurance market trends is provided in the report.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
  • The quantitative analysis of the market from 2023 to 2032 is provided to determine the market potential.

Australia and Canada Travel Insurance Market Report Highlights

Aspects Details
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By Insurance Cover
  • Single Trip Travel Insurance
  • Annual Multi-trip Travel Insurance
  • Long-Stay Travel Insurance
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By Distribution Channel
  • Insurance Intermediaries
  • Insurance Companies
  • Banks
  • Insurance Brokers
  • Insurance Aggregators
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By End User
  • Senior Citizens
  • Education Travelers
  • Business Travelers
  • Family Travelers
  • Others
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By Age Group
  • 1-17 Years Old
  • 18-30 Years Old
  • 31-49 Years Old
  • Above 50
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By Country
  • Australia
  • Canada
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Key Market Players

TD Insurance, Suncorp Group, Allianz Australia Limited, Cover-More, The Manufacturers Life Insurance Company, AIG Australia Ltd, Travel Guard, RSA Travel Insurance Inc., Nib Travel Insurance Distribution Pty Limited, Blue Cross Canada

Analyst Review

According to several interviews that were conducted of the top level CXOs, travel insurance providers in the Australia and Canada are looking forward to expanding their offerings to provide customized coverages for their customers. In addition, millennials, Gen Y, and Gen Z are the major users of travel insurance and are more inclined toward availing travel insurance policies. Therefore, insurers have lucrative opportunities to innovate their offerings via several online sources. However, a considerable number of companies remain under the perception that they have minimum travel insurance exposure. 

Moreover, the Australia and Canada travel insurance market was anticipated to grow at a significant pace in 2022. This is attributed to increase in sale of travel insurance policies due to rise in tourism and higher awareness of travel risk among different types of travelers. Consequently, there is increase in the number of customers buying travel insurance policy in Australia and Canada, especially due to online comparison-shopping sites such as direct airlines portals, online travel agency (OTA), among others, which are more convenient and easier to compare premium & coverages for the policy. 

The Australia and Canada travel insurance market is consolidated with the presence of key vendors such as Cover-More, The Manufacturers Life Insurance Company, TD Insurance, Travel Guard, and Allianz Australia Limited. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

Author Name(s) : Pramod Borasi and Beesetty Yogendra | Onkar Sumant

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Australia and Canada Travel Insurance Market

Opportunity Analysis and Industry Forecast, 2023-2032