Travel Insurance Market: Global Industry Analysis and Forecast (2023-2029) Trends, Statistics, Dynamics, Segment Analysis

Travel Insurance Market size was valued at USD 21.46 Bn. in 2022 and the total Travel Insurance revenue is expected to grow by 16 % from 2022 to 2029, reaching nearly USD 21 Bn.
Travel Insurance Market Overview:
Travel insurance helps travellers prepare for any unexpected events that may disrupt their journey. The fear of a COVID-19 pandemic following its outbreak in early 2020 is allowing travel insurance vendors to offer COVID-19 coverage. Coverage for related costs such as testing and quarantine. Rising tourism demand following the lifting of the COVID-19-related lockdown is propelling the travel insurance market forward. Travel insurance demand is expected to skyrocket as the tourism industry grows due to factors such as easy internet travel bookings, extensive media coverage of various holiday types, an increase in disposable income, and enhanced package holidays.

Increased tourism is driving the growth of the Travel Insurance market size due to factors such as increased disposable income, easy online travel bookings, package vacations, and robust holiday coverage. Consumers are choosing Travel Insurance to mitigate risks such as flight cancellations, luggage and critical document loss, and medical emergencies, which is increasing the Travel Insurance Market share. Convenient options for customers to purchase Travel Insurance via online comparison-shopping sites such as direct airline sites and online travel agents (OTAs), business websites & apps, and others drive the growth of the Travel Insurance Market. The Global Travel Insurance Market report offers a comprehensive analysis of the market. The report provides a thorough examination of key segments, trends, drivers, restraints, the competitive landscape, and factors that are significant in the market.

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Travel Insurance Market Dynamics:
Travel Insurance Market Driver

Booming post-pandemic tourism demand

Travel insurance demand is being driven by factors such as rising tourism demand and technological advancement. Moreover, the government's increasing travel laws and regulations for travelers and travel insurance providers are fueling global demand for travel insurance. The coronavirus outbreak had a negative impact on the travel insurance market. The pandemic had a significant impact on the global travel and transportation sector in 2020, causing travel disruption. The travel insurance market, on the other hand, expanded due to increased demand for travel protection and medical insurance while traveling during the post-pandemic period.

The coronavirus outbreak had a negative impact on the travel insurance market. The pandemic had a significant impact on the global travel and transportation sector in 2020, causing travel disruption. The travel insurance market, on the other hand, expanded due to increased demand for travel protection and medical insurance while traveling during the post-pandemic period.

Allianz Global Assistance, a Canadian travel assistance, and insurance provider announced the launch of its COVID-19 assistance and insurance coverage in May 2020, offering coverage up to USD 1,000,000 for emergency COVID-19 treatment, among other benefits. The plans are distributed by the company through its national distribution channel, which includes over 9,000 insurance brokers and travel agency partners. Travel insurance is a type of insurance that covers certain expenses and damages associated with travel. Travel insurance policies cover trip cancellation, medical emergencies, travel delays, and luggage coverage. The market growth, particularly post-pandemic, is due to the stringent rules and regulations imposed on travelers by various governments and regulatory authorities regarding the VISA policy. For example, beginning in January 2021, visitors to Singapore must have travel insurance that includes coverage for COVID-19-related medical care and hospitalization. The bare minimum of coverage is USD 30,000.

Emerging economies such as Germany, US, and India to boost the market growth

India - Less than 1% of the global travel insurance market is accounted for by the Indian market. As people become more mobile, travel has become an important part of their academic, business, and personal lives. Travel insurance's primary goal is to provide travellers with a stress-free experience while minimizing risks. As a result, purchasing a travel insurance plan to mitigate the risks associated with travel is always a better option. Travel insurance covers you for medical and non-medical travel-related emergencies such as lost tickets and passports, trip cancellation, curtailment, and interruption, luggage loss/delay, and so on.

The coverage also covers any financial losses incurred while traveling domestically or internationally, which is expected to help the country's travel insurance industry thrive. Furthermore, rising natural disasters and medical crises are among the most common issues encountered when traveling, necessitating the increased use of travel insurance. However, throughout the forecast period, a lack of understanding about insurance plans may pose a significant barrier to the growth of the Indian travel insurance market.

US - Residents of the United States who travel to international destinations for business or pleasure are the primary source of demand for travel insurance. Aircraft technology advancements have made air travel safer and less expensive, encouraging more US residents to take leisure trips abroad and purchase travel insurance to protect their travel investment. Furthermore, the increased globalization of markets and corporate supply chains have increased the demand for business travel. The number of international trips taken by US residents is expected to rise during the forecast period, providing an opportunity for the industry.

The travel insurance industry has a low market share concentration. Less than one-fifth of total industry revenue is expected to be accounted for by the top four industry operators. The fragmentation of the industry is due to its numerous distribution channels and niche, localized operators. Data management firms and institutional investment managers are among the industry's suppliers, with a total number of suppliers in the low thousands. American International Group Inc. (AIG) is the leading provider of travel insurance through its Travel Guard Brand. In the United States, travel insurance is regulated at the state level, and insurers are encouraged to obtain accreditation from the National Association of Insurance Commissioners. Travel insurance companies must follow the regulations of the jurisdiction in which they sell travel insurance, resulting in moderate-to-high regulatory compliance costs.

Germany- The government has mandated rules and regulations requiring consumers to obtain travel insurance as a condition of obtaining a VISA, which is expected to drive the growth of the German travel insurance market. Due to the increased travel in Germany, several incidents such as trip cancellations, loss of luggage and important documents, medical emergencies, and others occur. To mitigate these risks, consumers purchase travel insurance, which is a major driving force in the European travel insurance market. On the contrary, insurers in the region are expected to improve existing travel insurance distribution platforms to boost productivity using technologies such as geolocation, application programme interface (API), artificial intelligence (AI), data analytics, and global positioning system (GPS), among others. As a result of these factors, the Europe travel insurance market is expected to be lucrative in the forecast years.

Corporate travelers who travel on a regular basis

Various organisations purchase travel insurance to provide insurance coverage to their employees who travel internationally for business. Globally, business travel is recovering in stages as people get vaccinated and government travel restrictions are eased. Corporate travelers are becoming more at ease returning to their regular work lives, which is assisting market growth. According to the Global Business Travel Association, growing annual travel spending is expected to slow in 2023 and 2024 but remain above the historical average rate, with annual business travel spending exceeding USD 1.5 trillion by 2024.

Travel Insurance Market Restraints

Lack of financial resources hampers the growth

Several constraints exist in the vast travel insurance market that limits business entities' ability to capitalize on market opportunities. One of the most significant constraints is a lack of financial resources to integrate cutting-edge technologies into auto insurance solutions. Another constraint is the market participants' inability to adapt to the changing market environment. At the moment, the key players are developing strategic approaches to effectively overcome such obstacles in the travel insurance market.

There are numerous challenges in the travel insurance market that reduce its attractiveness and growth potential. One of the most significant challenges is the market's dynamic nature. Because of the integration of autonomous technology and the changing regulatory landscape, the market is undergoing transformational change. It has increased the unpredictability of the market's key players, who influence the global travel insurance market size.

Travel Insurance Market Opportunity

Increased Domestic and International Business Travel

The massive rise in national and international business travel to purchase raw materials from suppliers is propelling the global business travel insurance market forward. With the rise in business tourism, the number of incidents such as canceled flights, accidents, health issues, baggage theft or loss, natural disasters, and other such occurrences of uncertainty has increased. This increases demand for business travel insurance, contributing to the global market's growth.

Rapid digitalization in the corporate and tourism sectors, as well as an increase in Internet of Things (lol) penetration in various businesses, have boosted international business travel, which has significantly contributed to the market's global growth. Furthermore, the increased frequency of international travel by medium-sized businesses for meeting new clients, expanding their business, and learning new business trends has positively impacted the growth of the business travel insurance market.

Increase in the use of digital distribution channels by insurance providers

End-Users around the world have shifted toward the use of digital channels for purchasing insurance policies such as travel insurance, worker compensation insurance, and employee health insurance, which promotes market growth. The increased use of several online portals, such as direct airline sites and online travel agencies (OTAs), as well as company websites and applications, contributes to the expansion of the online insurance market.

Moreover, digital insurance distribution channels have provided several advantages to corporate owners, such as the ability for employees to immediately receive healthcare bill payments and to purchase travel insurance coverage from top-rated providers. For example, according to a 2019 survey conducted by Travelinsurance.com, the digital channel provides several ways to compare multiple travel insurance companies in order to purchase an affordable insurance policy, thereby fueling the market growth.
Travel Insurance Market Segment Analysis:
Based on Insurance Coverage, The market is divided into three sections based on insurance coverage: single-trip travel insurance, annual multi-trip travel insurance, and long-stay travel insurance. The single-trip travel insurance segment dominated the market with a share of 60.1% and is expected to grow at the fastest CAGR of 16.0% during the forecast period. The growth of the single-trip travel insurance segment can be attributed to factors such as baggage loss, emergency dental treatment costs, personal liability cover, fire cover, trip interruption or cancellation, missed flight connection, and many other services. Moreover, the annual multi-trip travel insurance segment is expected to grow at a CAGR of 15.3% during the forecast period. The increasing demand among business people, travellers, and other groups who make multiple trips per year can be attributed to the segment's growth.

Based on the Distribution Channel, The market is divided into insurance intermediaries, insurance companies, banks, insurance brokers, and insurance aggregators based on distribution channels. The insurance companies segment dominated the market in 2021, accounting for 34.8% of total revenue, and is expected to maintain its position throughout the forecast period. This segment's growth can be attributed to factors such as increasing consolidating risk among numerous policyholders and setting premiums based on the likelihood that a specific occurrence will occur and result in typical financial loss. Additionally, the banks' segment is expected to have the highest CAGR of 18.0% during the forecast period. The increasing insurance sales and underwriting by banks in regions such as Europe, Asia, and Australia are driving market growth in this segment.

Based on the End-Users, The market is divided into end-user segments such as education travellers, business travellers, senior citizens, family travellers, and others. Individuals and groups are also included in the other sub-segment. The senior citizen segment generated the most revenue in 2022, totaling USD 5,805.5 million, and is expected to grow at a CAGR of 13.9% during the forecast period. The services provided, such as emergency evacuation, ticket subsidies, trip cancellation coverage, and luggage loss coverage, are fueling the market growth of this segment. Moreover, the business travel insurance segment accounted for a significant market share of USD 2,724.1 million in 2021 and is expected to expand at the highest CAGR of 17.6% during the forecast period. This growth can be attributed to a significant decrease in business travel plans and an increase in the number of business trips in recent years, which are the primary factors driving the growth of this segment.
Travel Insurance Market Regional Insights:
Europe dominated the market with a 43.1% share in 2022and is expected to grow at a CAGR of more than 14.3% during the forecast period. Factors such as increased travel and tourism resulted in increased wealth, modern communication, and peace among neighbors. According to a survey conducted in June 2020 by the Research and Statistical Department of SchengenVisaInfo.com, which included 2,636 respondents and 87 different third-country nationals, 62% of travelers planned to visit Europe soon after the European governments reopened the borders due to the COVID-19 pandemic.

Asia-Pacific is expected to grow at the fastest rate of 16.7% during the forecast period. The increasing advancement of medical, increased agility, and security travel insurance policies can be attributed to the region's market growth. For example, the Singaporean government announced the first two vaccinated travel lanes with Brunei and Germany in September 2021. Travelers using these lanes would not be subject to stringent restrictions and would instead be subjected to routine COVID-19 tests.
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Travel Insurance Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2018 to 2022
Market Size in 2022:
US $ 21.46 Bn.


Forecast Period 2023 to 2029 CAGR:
16%
Market Size in 2029:
US $ 21 Bn.


 Segments Covered:
by Insurance Coverage
• Single-trip Travel Insurance
• Annual Multi-trip Travel Insurance
• Long-stay Travel Insurance


by Distribution Channel
• Insurance Intermediaries
• Insurance Companies
• Banks
• Insurance Brokers
• Insurance Aggregators


by End-Users
• Education Travelers
• Business Travelers
• Senior Citizens
• Family Travelers
• Others



Travel Insurance Market, by Region
• North America
• Europe
• Asia Pacific
• South America
• Middle East and Africa
Travel Insurance Market Key Players
• American International Group, Inc.
• ASSICURAZIONI GENERALI S.P.A.
• USI Insurance Services, LLC
• battleface
• Insure & Go Insurance Services Limited
• Seven Corners Inc.
• Travel Insured International
• Zurich
• Delphi Financial Group, Inc.
• Ping An Insurance (Group) Company of China, Ltd.
• Allianz Group
• Munchener-Ruck-Gruppe
• Talanx Konzern
• R+V Konzern
• Generali Deutschland AG
• AXA Konzern AG
• Bayern
• Huk-Coburg
• Signal Iduna
• Travelex Insurance Services Inc.
• Berkshire Hathaway Travel Protection

Frequently Asked Questions:

1] What segments are covered in the Global Travel Insurance Market report?
Ans. The segments covered in the Travel Insurance Market report are based on Insurance coverage, Distribution Channel, End- User and Region.

2] Which region is expected to hold the highest share in the Global Travel Insurance Market?
Ans. The Europe region is expected to hold the highest share in the Travel Insurance Market.

3] What is the market size of the Global Travel Insurance Market by 2029?
Ans. The market size of the Travel Insurance Market by 2029 is expected to reach US$ 21 Bn.

4] What is the forecast period for the Global Travel Insurance Market?
Ans. The forecast period for the Travel Insurance Market is 2022-2029.

5] What was the market size of the Global Travel Insurance Market in 2022?
Ans. The market size of the Travel Insurance Market in 2022 was valued at US$ 60.65 Bn.