The travel insurance market is projected to grow at a CAGR of 8.22% during the forecast period to reach US$51.683 billion by 2027, from US$29.793 billion in 2020.
Travel insurance is a protection policy for tourists and travellers covering unforeseen losses and damages while travelling. Most travel insurance plans usually primarily cover emergency medical bills while traveling abroad. However, comprehensive policies usually include trip cancellation, lost luggage, aircraft delays, public liability, as well as other costs. Travel insurance policies are usually available for both international tourists as well as domestic travellers.
The global travel insurance market is expected to rise substantially as countries have started to relax lockdowns and COVID-19 measures. The COVID-19 outbreak led to a significant slowdown in the travel insurance market, owing to the decrease in travel and tourism. However, the market has seen an increase in revenge spending among people post-pandemic, where consumers spend more money on products and services than they normally would. Revenge spending has affected the overall economic growth of countries positively and is expected to drive the tourism sector and the travel insurance market.
However, developing countries still lag in the travel insurance market, primarily due to the rising cost of travel insurance policies. Unless strict measures are implemented for market prices, developing countries will continue to lag behind.
Owing to the COVID-19 outbreak and the government-imposed lockdowns, the travel industry saw a massive decline in the market. However, the global tourism sector has been recovering past the pandemic, and the tourism sector is expected to see a considerable increase in revenue generation. The increase in revenge spending among people has been considered an essential factor in increasing tourism revenue.
In January 2022, international tourism continued to improve, with a substantially higher performance than in the first half of 2021. Global foreign tourist visits more than doubled (+130 percent) in January 2022 compared to January 2021, according to the UNWTO; the 18 million additional visitors reported in the first month of this year match the overall rise for the entire year of 2021.
With the increasing higher education market, the travel insurance demand is also expected to increase post the virus outbreak. Students and parents, mostly from developing countries, have realized the potential for students to receive proper education in countries with developed educational environments. While most countries do not require travel insurance, some countries, like Germany, require mandatory travel insurance for students to acquire a Schengen visa. Travel agents also recommend getting travel insurance for countries that do not have public healthcare services, like the USA and China.
With the growing adoption of smartphones and handheld devices, travel bookings and insurance policies have become more accessible for the common people. Travel agency websites and services have made it easier for consumers to book, transact and cancel tickets and bookings. Travel websites also offer rewards for domestic and international travellers throughout the year.
Travel insurance has become an important asset for travellers around the world. Some countries have even made travel insurance mandatory for international tourists. However, despite the significant potential of travel insurance, it is still a secondary choice for travellers from developing or small countries. Owing to its non-economical and expensive pricing, travel insurance is considered to be unnecessary by developing countries.
Moreover, the economic growth in these developing nations is usually slower than in other countries, owing to the COVID-19 pandemic and the global market scenario. The United Nations Conference on Trade and Development (UNCTAD) has lowered its prediction for global economic growth in 2022 from 3.6 percent to 2.6 percent, warning that developing nations will be the most susceptible. This fall in the economic growth of developing nations would consequently decrease the scope of the travel industry, as well as the travel insurance market.
The fall in tourism has also affected the regional economy
According to data from the UNWTO, the number of foreign visitor arrivals decreased by 84% between March and December 2020 compared to the previous year. Europe, one of the biggest markets for the travel insurance market, also faced massive losses due to the pandemic. According to the data released by the TRAN Committee, the impact of travel and tourism on overall GDP in Europe fell from 9.5 percent in 2019 to 4.9 percent in 2020. In 2020, international tourism arrivals in Europe fell by 70% compared to 2019.
The COVID-19 pandemic left a lasting effect on the travel insurance market. The government imposed lockdowns, and with the increasing number of people affected by the virus, people were forced to cancel travel plans and bookings, leading to the global travel industry facing a massive downfall.
|Market Size Value in 2020||US$29.793 billion|
|Market Size Value in 2027||US$51.683 billion|
|Growth Rate||CAGR of 8.22% from 2020 to 2027|
|Forecast Unit (Value)||USD Billion|
|Segments Covered||Type of Insurance Plan, Application, Type of Travel, And Geography|
|Regions Covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies Covered||Tata AIG General Insurance Company Limited, Berkshire Hathaway Specialty Insurance Company, AXA Travel Insurance, Seven Corners Inc., AGA Service Company, Aviva, Travel Insured International, Generali Global Assistance & Insurance Services, Travelex Insurance Services Inc., USI Affinity Travel Insurance Services|
|Customization Scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What are the growth prospects for the travel insurance market?
A1. The global travel insurance market is projected to grow at a CAGR of 8.22% during the forecast period.
Q2. What will be the travel insurance market size by 2027?
A2. The travel insurance market is projected to reach a market size of US$51.683 billion by 2027.
Q3. What is the size of the global travel insurance market?
A3. Travel Insurance Market was valued at US$29.793 billion in 2020.
Q4. How is the global travel insurance market segmented?
A4. The travel insurance market has been segmented by type of insurance plan, application, type of travel, and geography.
Q5. What factors are anticipated to drive the travel insurance market growth?
A5. The global travel insurance market is expected to rise substantially as countries have started to relax lockdowns and COVID-19 measures.
1.1. Market Overview
1.2. Covid-19 Scenario
1.3. Market Definition
1.4. Market Segmentation
2. RESEARCH METHODOLOGY
2.1. Research Data
3. EXECUTIVE SUMMARY
3.1. Research Highlights
4. MARKET DYNAMICS
4.1. Market Drivers
4.2. Market Restraints
4.3. Porter’s Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Powers of Buyers
4.3.3. Threat of Substitutes
4.3.4. Threat of New Entrants
4.3.5. Competitive Rivalry in Industry
4.4. Industry Value Chain Analysis
5. TRAVEL INSURANCE MARKET, BY TYPE OF INSURANCE PLAN
5.2. Trip Cancellation Insurance
5.3. Baggage or Personal Item Loss Insurance
5.4. Medical Insurance
6. TRAVEL INSURANCE MARKET, BY APPLICATION
7. TRAVEL INSURANCE MARKET, BY TYPE OF TRAVEL
8. TRAVEL INSURANCE MARKET, BY COUNTRY
8.2. North America
8.3. South America
8.4.3. United Kingdom
8.5. Middle East and Africa
8.5.1. Saudi Arabia
8.5.4. South Africa
8.6. Asia Pacific
8.6.4. South Korea
9. COMPETITIVE ENVIRONMENT AND ANALYSIS
9.1. Major Players and Strategy Analysis
9.2. Emerging Players and Market Lucrative
9.3. Mergers, Acquisition, Agreements, and Collaborations
9.4. Vendor Competitiveness Matrix
10. COMPANY PROFILES
10.1. Tata AIG General Insurance Company Limited
10.2. Berkshire Hathaway Specialty Insurance Company
10.3. AXA Travel Insurance
10.4. Seven Corners Inc.
10.5. AGA Service Company
10.7. Travel Insured International
10.8. Generali Global Assistance & Insurance Services
10.9. Travelex Insurance Services Inc.
10.10. USI Affinity Travel Insurance Services
Tata AIG General Insurance Company Limited
Berkshire Hathaway Specialty Insurance Company
AXA Travel Insurance
AGA Service Company
Travel Insured International
Generali Global Assistance & Insurance Services
USI Affinity Travel Insurance Services
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