Travel credit insurance market exceeds $14.1b

Rising tourism and exposure to natural disasters are increasing protection demand across APAC.

The global travel credit insurance market was valued at $14.1b in 2023 and is projected to expand at a compound annual growth rate (CAGR) of over 10% between 2024 and 2032.

Regionally, the Asia-Pacific region, including Japan, China, and India, is also experiencing growth, supported by rising disposable incomes, expanding tourism, and exposure to natural disasters and geopolitical tensions, according to Global Market Insights.

Meanwhile, the Middle East and Africa region is expected to see significant growth due to expanding business and leisure travel across both individual and corporate cardholders.

North America led the global market in 2023, generating $4b in revenue. Demand in the region is driven by frequent travellers seeking protection against flight cancellations, medical emergencies, and unexpected events.

The Heightened awareness of travel risks, including natural disasters, political instability, and health crises, is driving demand as consumers seek financial protection against potential disruptions. 

In response, established firms and insurtech start-ups are launching new products through industry partnerships.

Major platforms are moving into the sector. In January 2022, Airbnb announced plans to launch a tailored guest travel insurance product underwritten by an insurance carrier partner. 

Similarly, in September 2022, insurtech start-up InsuranceDekho introduced travel insurance on its digital platform, partnering with insurers including HDFC Ergo, Care, Reliance General, ICICI Lombard, and Bajaj Allianz.

Collaborations with airlines, booking platforms, and fintech companies allow start-ups to access existing networks and offer features such as integrated booking and personalised coverage options.

Despite market expansion, industry growth faces hurdles. Perceived extra costs lead budget-conscious travellers to treat insurance as optional. 

Complex policy language, reliance on alternative coverage such as credit card benefits or state healthcare, and a lack of understanding also reduce consumer uptake, the report added.