Travel Insurance Market worth over $45bn by 2027
Published Date: January 21, 2021 Authors: Preeti Wadhwani, Saloni Gankar
Travel Insurance Market size is set to surpass USD 45 billion by 2027, according to a new research report by Global Market Insights, Inc.
The mandatory travel insurance policies in several countries will fuel the market growth. There are 34 countries that mandate travel policy for tourists to prevent the occurrence of financial crisis, liability for property damage, accidents, and loss of luggage/passports. For instance, in the wake of the coronavirus crisis, international tourists in Brazil are required to purchase a travel medical insurance policy that includes coverage for COVID-19 for the trip duration. The travel insurance covers costs incurred during hospitalization for availing immediate medical assistance required on account of an injury sustained or any illness contracted on a trip abroad.
The ongoing coronavirus pandemic negatively impacted the travel insurance industry growth in 2020 due to stringent lockdown measures imposed by several government organizations globally. The COVID-19 outbreak resulted in an unparalleled impact on the market growth due to a sharp decline in international tourism. According to the United Nations World Tourism Organization (UNWTO), international tourist arrivals declined by 20% to 30% in 2020, representing a loss of USD 300 to 450 billion in international tourism receipts.
Increasing demand for domestic travel insurance plans that ensure financial security during unexpected events
The domestic travel insurance market will register substantial CAGR till 2027, with the rise in the number of corporates travelling to a different city in developing countries. According to Travel Trends Today, around 30 million Indians are subject to domestic travel each year, creating a significant opportunity for the industry expansion.
Travel insurance facilitates reimbursements for domestic travelers in the event of trip delays, loss of travel documents, or medical emergencies. The likelihood of loss of baggage in domestic flights is as high as that during international travels. Although several airlines have compensation policies for baggage loss, it may not be adequate to cover the cost of the traveler’s belongings. Travel coverage offers complete reimbursement in such events. It also compensates for delays or flight cancellations.
Several banks are offering attractive travel insurance packages
With the rise of international tourism, several banks are capitalizing on the industry to offer customized travel insurance policies. For instance, ICICI Bank offers multi-trip plan suitable for frequent flyers. The plan covers 365 days from the date of travel, irrespective of the region of destination. A rise in the number of students undertaking education in foreign countries has also encouraged banks to launch innovative travel insurance policies designed specifically for education travelers.
Browse key industry insights spread across 300 pages with 272 market data tables and 28 figures & charts from the report, “Travel Insurance Market Size By Type (Domestic, International), By Trip (Single, Multiple, Extended), By Provider (Insurance Companies, Banks), By End-Use (Senior Citizens, Corporate Travelers, Family Travelers, Education Travelers, Backpacker & Adventure Travelers), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027” in detail along with the table of contents:
Rise in the number of adventure travelers globally, adopting insurance plans for medical emergencies
There is a rise in the number of travelers undertaking international trips for adventure purposes such as underwater sports and hiking. According to Diving Equipment and Marketing Association, visitors participating in recreational scuba diving and snorkeling contribute around USD 904 million to the economy of Florida, the U.S. every year. As underwater sports can cause unexpected medical emergencies, travelers adopt medical travel insurance plans to ensure uninterrupted medical treatment in foreign countries.
Expanding tourism industry in the Middle East & Africa
Several countries in the region, such as the UAE and Saudi Arabia, have witnessed a rise in the number of international tourists over the recent years. The government organizations in these regions are focusing on expanding the tourism sector to attract tourists and boost the overall economic growth. Sharjah Tourism Vision 2021 aims to attract over 10 million tourists by 2021. In September 2019, Bahrain opened a large theme park, Dive Bahrain that offers visitors the opportunity to experience a unique diving experience. Such initiatives boosting the tourism market in the region will encourage travelers to adopt insurance plans.
Growing competition among companies to offer innovative packages
Key companies in the travel insurance market include HanseMerkur Reiseversicherung AG, Groupama Sigorta AS, Generali Group, Chubb Limited, China Pacific Insurance, (Group) Co., Ltd., Berkshire Hathaway Specialty Insurance, AXA Travel Insurance, Aviva PLC, Arch Capital Group Limited, American International Group, Inc. (AIS), American Express Company, and Allianz Partners.
These players focus on expanding their offerings to include a wide range of products and services. For instance, Tata AIG General Insurance Company Limited offers travel insurance plans introduced specifically for the specific requirements of senior citizens. The plan covers medical expenses, delays in flights, or baggage loss. As immediate medical attention is crucial for the elderly, there is a high demand for insurance packages catering to medical emergencies for senior citizens. In worst case scenario of the death of senior citizens during travel or in a foreign country, players are also providing insurance plans offering repatriation coverage.