Global Travel Insurance Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Type Of Insurance Plan (Trip Cancellation Insurance, Baggage Or Personal Item Loss Insurance, Medical Insurance, Others), By Application (Domestic, International), By Type Of Travel (Business, Leisure, Education), And By Geography - Forecasts From 2022 To 2027

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.

Introduction

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.

Market Trend:

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.

Growth Factors

• Increase in travel after the pandemic

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.

• Higher education market to augment the growth

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.

• Advancements in the sector

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.

• The International Medical Group (IMG) has been honoured with two Forbes Advisor Best of 2022 Awards categories: Best Travel Insurance Companies of 2022 and Best Cancel for Any Reason Travel Insurance of 2022. IMG was recognized as one of the best travel insurance companies among 45 other competitors.
• In April 2022, AXA UK Plc, an AXA business entity that provides a wide range of travel services, specialized insurance, and credit protection products, announced its plan to partner up with Trip.com to extend travel insurance policies throughout Europe. The travel insurance plan, offered in the UK in September 2021, provides a wide range of advantages, including medical, cancellation, and luggage coverage, and may be selected when booking a ticket on Trip.com, a worldwide travel agency and part of the Trip.com Group. Customers are also protected from cancellation and medical charges if they contract COVID-19 under the coverage. Europe remains one of the biggest markets for the travel insurance industry, and joint efforts like these help uplift the sector.      
• In May 2022, IMG announced the launch of iTravelInsured Essential, which was the company’s most affordable travel protection policy, that enables travellers to safeguard their pre-paid, non-refundable trip expenditures with the most essential travel insurance protections, such as U.S. citizens travelling within the U.S.
• In April 2022, a new travel insurance program named Road Trip Insure was introduced by USI Affinity's Travel Insurance Services. The new Road Trip Insure plan is specifically designed to meet the expanding needs of U.S. citizens travelling domestically or internationally by vehicle, including recreational vehicles. It includes travel insurance that is underwritten by the United States Fire Insurance Company, a member of the Crum & Forster group of companies.
• In March 2022, The travel insurance firm of USI Affinity, USI Affinity Travel Insurance Services, was listed on Forbes Advisor's annual list of the Best Travel Insurance Companies for the third consecutive year. It received the ranking due to its excellent policy features and accessible coverage choices to travellers.

Restraint

• Lack of focus on developing countries

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.

Global Travel Insurance Market Scope:

Segmentation

• By Type of Insurance Plan
  • Trip Cancellation Insurance
  • Baggage or Personal Item Loss Insurance
  • Medical Insurance
  • Others
• By Application
  • Domestic
  • International
• By Type of Travel
  • Business
  • Leisure
  • Education
• By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    •  Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Spain
    • Italy
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Israel
    • South Africa
    • Others
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Taiwan
    • Thailand
    • Indonesia
    • Others