Travel Insurance Market Overview :
The travel insurance market share is expected to generate $28,264 million by 2022, growing at a CAGR of 8.5% during 2016‐2022. In 2015, Europe lead the travel insurance industry, followed by Asia-Pacific.
A series of unusual events of natural disasters and terrorist attacks in 2015, such as Ebola epidemic, Nepal earthquake, and the Paris attack has increased the usage of travel insurance policies. Moreover, factors, such as growth in tourism, rise in globalization, and trade practices have made this industry more attractive.
Travel insurance provides an extensive range of benefits for events, such as trip cancellation due to medical emergency, loss of baggage, evacuation due to medical condition or hijack, and loss of travel documents. However, it is considered as an unrequired expense by a large pool of travelers. Lack of awareness and guidance is a major factor that refrains travelers from opting for travel insurance.
The global travel insurance market is segmented on the basis of insurance cover, distribution channels, users, and geography. Based on insurance cover, the market is classified into single trip travel insurance, annual multi-trip travel insurance and long stay travel insurance. Insurance policies are sold through different distribution channels, such as insurance intermediaries, insurance company, banks, insurance brokers, insurance aggregator, and others. Users who opt for travel insurance policies are backpackers, senior citizens, education traveler, business traveler, fully independent traveler, and family travelers. The market has further been analyzed across geographical regions namely North America (U.S., Canada, and Mexico), Europe (U.K., Germany, France, and Rest of Europe), Asia-Pacific (China, Japan, India, Australia, South Korea, and Rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).
GEN S: Major Buyers of Travel Insurance
Japan, Australia, U.S., and European countries, such as Italy, Greece, Germany, Portugal, and Finland among others are witnessing an increase in senior citizen (above age of 60) population along with an increase in the percentage of travelers within this population group. The prime factors behind this surge in Gen S travelers include low dependency ratio, rise in disposable income, more spare time, and rise in aspirations. Visiting friends and relatives is also another factor that supplements the increase in number of travelers.
Senior citizens offer immense opportunity for travel insurance companies as they have been identified as the major buyers of the long-duration travel insurance policies. Leisure and medical treatment are main reasons of travel for senior citizens. After working tirelessly for decades, the Gen S individuals seek to travel and explore exotic locations and cherish these experiences forever. Also, even as many senior citizens delay their overseas trips post-retirement, there is a growth in the trend of young professionals sending/calling their parents overseas. During a longer stay abroad (more than a month), aged people are exposed to changed living conditions. As the local insurance is, in general, not available or very expensive, there is an emerging trend of children buying travel insurance cover for their parents. Additionally, an increase in trend of online purchase of travel insurance is observed among senior citizens, as they purchase their tickets online.
Over the next 20 years, all Asia-Pacific economies would see a significant increase in the number of older people and this trend would be particularly observed in Singapore, China, and Korea. The over 50s, and more specifically the over 65s, shall account for an increasingly significant portion of leisure travelerspredominantly in Australia and Japan, where over 65s now account for over 20% of all leisure travelers.
LAMEA: Most Lucrative Travel Insurance Market
As per the UNWTO statistics, the outbound travel in the MENA (Middle East and North Africa) region would continue to grow during the forecast period. By 2030, the region is expected to have a total of 81 million outbound travelers. These travelers tend to spend a significant amount of money while traveling, prefer to travel in large groups, and stay abroad for longer than an average tourist stay duration. In 2014, one in six of these travelers booked their trip online, highlighting the opportunity for travel insurance companies to add travel insurance as an additional product offering of such online purchases. Moreover, attractive tourist destinations and rise in number of tech-savvy outbound travelers with high travel spending drive the demand for travel insurance in the Middle East. Demand for travel insurance is expected to increase in 2016 by 50% as compared to 2015 following the spate of recent terror attacks in France, Germany, and other European countries as European destinations are popular tourist place among travelers from the Middle East countries. In addition, it is expected that Qatar FIFA World Cup 2022 would also supplement the growth of this market.
In case of Latin America, citizens and visitors are at a greater risk as they may face extortion, kidnappings, or muggings from organized criminal groups. To cater to the same, kidnap and ransom insurance (K&R) has become a major part of travel insurance policy designed for this region.
For the African travel insurance market, increase in number of tourists visiting African countries, and growth in demand for adventure trips in the region offer promising opportunities for market players.
Low penetration of insurance policies throttling the market growth
Globally, the average insurance penetration stood at 6.3% in 2015. The major factors that attribute to the low percentage are level of economic development of different countries, the extent of the savings in financial instruments, and the reach of the insurance sector. It has been observed that in underdeveloped countries, such as Ethiopia, insurance penetration is as low as 0.3% and for developing countries, such as India it stands at 3.9%. The lack of awareness about insurance policies has acted as a major restraint for the insurance industry. To cater to the same, governments of different countries adopt different programs to spread awareness about insurance. For instance, Government of Australia launched “CHOICE initiative” to help Australians understand travel insurance better. Key players profiled in this report are CSA Travel Protection, USI Affinity, Seven Corners Inc., TravelSafe Insurance, MH Ross Travel Insurance Services, Allianz Global Assistance, Travel Insured International, AXA SA, AIG Travel, and InsureandGo. Other players in the value chain include Berkshire Hathaway Specialty Insurance, Travelex Group, Tokio Marine HCC Medical Insurance Services Group, Aviva PLC, American Express Company, and Travel Insured International.
TRAVEL INSURANCE MARKET KEY BENEFITS
- The study provides an in-depth analysis of the global travel insurance market size with current trends and future estimations to elucidate the imminent investment pockets.
- The report provides a quantitative analysis from 2014 to 2022, which is expected to enable the stakeholders to capitalize on prevailing market opportunities.
- The report provides actual historical figures for 2014 and 2015 and provides forecasts for 2016‐2022, considering 2015 as base.
- Competitive intelligence highlights the business practices followed by leading players across various regions.
TRAVEL INSURANCE MARKET KEY SEGMENTS
BY INSURANCE COVER
- Single Trip Travel Insurance
- Annual Multi-trip Travel Insurance
- Long-Stay Travel Insurance
BY DISTRIBUTION CHANNEL
- Insurance Intermediaries
- Insurance Company
- Insurance Broker
- Insurance Aggregator
- Senior Citizens (Above age of 60 years)
- Education Traveler
- Business Traveler
- Family Traveler
- Fully independent Traveler
- North America
- Rest of Europe
- Rest of Asia-Pacific
- Latin America
MARKET PLAYERS IN VALUE CHAIN
- CSA Travel Protection
- USI Affinity
- Seven Corners Inc.
- Travel Safe
- MH Ross
- Allianz Global Assistance
- Travel Insured International
- AXA SA
- AIG Travel
- Berkshire Hathaway Specialty Insurance
- Travelex Group
- Tokio Marine HCC Medical Insurance Services Group
- Aviva PLC
- American Express Company
- Travel Insured International