According to a recent report published by Allied Market Research, titled, “Travel Insurance Market By Insurance Cover, Distribution Channel, and End User: Opportunity Analysis and Industry Forecast, 2020-2027”, the global travel insurance market was valued at $19.2 billion in 2019, and is projected to reach $39.3 billion by 2027, registering a CAGR of 17.4% from 2020 to 2027.
Travel insurance provides coverage for risks associated, such as injury or death, loss of luggage, delays, and others, while traveling. The premiums vary according to the plans and coverages such as trip cancellation, loss of luggage & travel documents, medical expenses and emergency medical evacuations, and others. Further, significant increase in tourism, innovative technologies, development in travel rules & regulations, and others are some of the lucrative factors that boost the market growth.
Increased usage of smartphones and internet for online travel insurance purchases via direct airline sites, online travel agencies (OTAs), and company websites & applications are gaining momentum space and are contributing to the growth of the online travel insurance market. In addition, rise in tourism due to increase in disposable income, easy online travel bookings, package holidays, extensive coverage of holidays, and others drive the market growth.
With an 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 travel insurance market. However, lack of awareness toward travel insurance policies, low consumer experiences in terms of coverages, premium rates, and services by third-party providers of travel insurance remains a primary concern, as a result, these factors limit the growth of travel insurance premium in the market.
On the contrary, technological developments such as geo-location, application program interface (API), artificial intelligence (AI), data analytics, and global positioning system (GPS), among others, are providing lucrative opportunities for insurers in the market. The insurers are expected to enhance existing distribution platforms of travel insurance to accelerate productivity and provide seamless user experiences with the help of digital technologies. Thus, these factors are expected to provide lucrative opportunities during the forecast period.
On the basis of insurance cover, the single trip travel insurance segment dominated the travel insurance industry in 2019 and is projected to maintain its dominance during the forecast period. Single trip travel insurance provides customized offerings & covers a combination of eventualities, including trip cancellation, injury & illness, public liability, emergency repatriation, loss of baggage, and others. In addition, the growth of this insurance cover is expected to gain momentum space due to its best suited policies for family travelers preferring vacation once or twice a year, thus expected to grow at a significant CAGR during the forecast period.
The insurance intermediaries sector dominated the travel insurance industry in 2019 and is projected to maintain its dominance during the forecast period, owing to intermediaries directly deal with a range of hotel chains and flight operators for providing better customer services in the market. Moreover, majority of travel bookings are made via core travel agent and tour operator involved in this intermediary. As a result, travel intermediaries providing travel insurance & assistance services; thereby, representing a significant travel insurance market growth in the segment during the forecast period.
Furthermore, the insurance aggregators segment is expected to grow at a significant CAGR during the forecast period, owing to aggregators in the distribution channel offering an online comparison-shopping sites, allowing consumers to easily compare product in terms of coverages, carriers, features, amount of premiums, and others. In addition, it provides sufficient information about the products by bringing together plans from several travel insurance companies in the market.
By region, the global travel insurance market was dominated by Asia-Pacific in 2019 and is expected to maintain this trend during the forecast period. The major factors driving the growth of the market in this region include rise in number of senior citizens across countries such as Australia, Japan, China, and India. In addition, government of various countries such as Japan, Malaysia, Australia, and Thailand are focusing on formulating regulations that mandate the travel insurance for all international travelers; thereby, becoming major travel insurance market trends in the region.
In order to sustain in the health crisis, travel insurers are tackling this pandemic situation by implementing several strategies depending on country guidelines. Changing & developing their existing policies, avoiding sale of new policy, customizing coverages, and other such factors are managed by the travel insurance in the market. These travel insurers are enhancing their product offerings and implementing technologies to provide travel insurance coverage to the policyholders. For instance, in India, as per Insurance Regulatory and Development Authority’s (IRDAI) circular; insurers such as HDFC Ergo, ICICI Lombard, SBI General, and Bajaj Allianz General Insurance are offering an option of rescheduling the policy free of charge.
Key Findings of the Study
- By insurance cover, the single trip travel insurance segment led the travel insurance market size in terms of revenue in 2019.
- By end user, the family travelers segment accounted for the highest travel insurance market share in 2019.
- By region, Asia-Pacific generated the highest revenue in 2019.
The key players profiled in the travel insurance market analysis are Allianz Group, American International Group Inc., Assicurazioni Generali S.P.A, AXA, Insure and Go Insurance Services Limited, Seven Corners Inc., Travel Insured International, TravelSafe Insurance, USI Insurance Services, and Zurich Insurance Co. Limited. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.