United States Travel Insurance Market Expected to Reach $5.5 Billion by 2028
DUBLIN, Nov. 29, 2023 /PRNewswire/ — The “United States Travel Insurance Market Competition Forecast & Opportunities, 2028” report has been added to ResearchAndMarkets.com’s offering.
The United States travel insurance market is projected to reach a value of $5.5 billion by 2028, growing at a CAGR of 5%. This growth can be attributed to factors such as increasing disposable income and a rise in business tours and travel. Travel insurance, which covers expenses and risks associated with travel, benefits both domestic and international travelers. Many companies now offer round-the-clock emergency services, including assistance with lost passports, money wires, and rebooking canceled flights. Customizable options are available based on the insured individuals’ needs and geographical location.
According to a 2021 survey conducted by insurance provider Battleface, nearly half of Americans faced fines or had to bear the cost of damages when traveling without travel insurance. Following the COVID-19 outbreak, 36% of Americans expressed an increased inclination to purchase travel insurance for international travels, while 34% stated the same for domestic travel. Between 2018 and 2020, customers spent approximately $1.72 billion on various travel insurance products, as reported by the U.S. Travel Insurance Association (UStiA).
The growing awareness of travel insurance as a financial safeguard against unforeseen events such as trip cancellations, medical emergencies, and loss of luggage has contributed to the expansion of the United States travel insurance market. Technological advancements, including data analytics and machine learning, have enabled insurers to better understand and cater to customer needs. This has resulted in the development of more personalized and tailored travel insurance products, further driving the market’s growth.
Furthermore, the COVID-19 pandemic has emphasized the importance of having travel insurance, leading to a surge in demand for products that offer COVID-19 coverage. This has further boosted the growth of the travel insurance market in the United States.
The market’s growth is also supported by the availability of a wide range of travel insurance products, including single-trip, annual, and multi-trip policies. The increasing adoption of online sales channels has made it convenient for travelers to purchase travel insurance, thereby propelling market growth.
In recent years, the rapid expansion of low-cost and luxury hotels has contributed to the travel industry’s growth. Additionally, the rising number of individuals traveling for vacation has increased the need for travel insurance. It helps travelers prepare for unforeseen circumstances that could disrupt their travel plans. With the outbreak of COVID-19, the demand for travel insurance surged even further, covering expenses related to Covid-19 tests and quarantine. As a result, the market is expected to grow in response to the increasing travel demand.
The stringent government regulations are also expected to contribute to the expansion of the market. However, the inclusion of travel coverage in only a few insurance plans poses a constraint on the market’s growth during the forecast period. The introduction of new technology has enhanced people’s travel experiences, presenting potential for market expansion throughout the projected period.
The United States travel insurance market is characterized by high competition, with key players such as Seven Corners, Inc., USI Insurance Services, LLC, Customized Services Administrators, Inc., and Trip Mate, Inc., among others. These players offer a wide range of travel insurance products through various distribution channels, including online travel agencies, insurance brokers, and direct-to-consumer channels.
Market growth is fueled by the rising tourism sector. The increasing number of people traveling for leisure and business purposes, coupled with growing awareness about the benefits of travel insurance, has contributed to the steady growth of the travel insurance market in the United States.
These insurance products provide financial assistance to travelers in medical emergencies, passport loss, airline cancellations, and lost luggage situations. The number of international tourists visiting the United States has been on the rise, reaching 22.1 million in 2021 from 19.2 million in 2020. Factors such as higher incomes, increased leisure time, higher education levels, and improved transportation modes contribute to the expanding demand for tourism.
According to the World Travel & Tourism Council’s economic modeling, travel and tourism in the United States are expected to make a significant comeback in 2022, contributing approximately $2 trillion to the country’s gross domestic product and surpassing pre-pandemic levels by 6.2%. Therefore, the growing tourism sector is a major driver of the United States travel insurance market, and this trend is expected to continue in the future.
The market’s growth is also supported by the availability of attractive insurance plans. With more insurance providers offering affordable and comprehensive plans, the travel insurance market is poised for significant expansion.
These plans typically cover trip cancellation, trip interruption, emergency medical expenses, baggage loss or damage, and other travel-related risks. The availability of customizable coverage options, such as adventure sports coverage, coverage for pre-existing medical conditions, and coverage for high-value items, has further fueled market growth. Companies offer enticing packages tailored to various travel needs.
For example, Seven Corners provides The RoundTrip Trip Cancellation Travel Insurance plan, offering single trip coverage for residents of the United States, whether domestically or abroad. The plan is available in two tiers: RoundTrip Elite and RoundTrip Economy, each offering specific coverage benefits. Furthermore, the increasing adoption of digital platforms has made it easier for travel insurance providers to offer attractive plans that cater to the specific needs and budgets of travelers. Travelers can now conveniently purchase insurance online, compare different plans, and choose the most suitable option.
Therefore, the availability of appealing travel insurance plans with comprehensive coverage options has been a significant factor driving the growth of the travel insurance market in the United States, and this trend is expected to continue in the future.
Conclusion
The United States travel insurance market is experiencing steady growth, with a projected value of $5.5 billion by 2028. Factors such as increasing disposable income, rising business tours and travel, and growing awareness of the benefits of travel insurance contribute to this growth. The COVID-19 pandemic has further emphasized the importance of travel insurance, leading to a surge in demand for products that offer COVID-19 coverage. The availability of a wide range of travel insurance products and the adoption of online sales channels have made it convenient for travelers to purchase insurance. The tourism sector’s expansion and the availability of attractive insurance plans also drive market growth. With the increasing number of people traveling for leisure and business purposes, the United States travel insurance market is expected to continue its upward trajectory.
Quote from ResearchAndMarkets.com:
“The United States travel insurance market is projected to witness significant growth in the coming years. Factors such as increasing disposable income, rising tourism, and growing awareness about the benefits of travel insurance are driving market growth. The COVID-19 pandemic has further highlighted the importance of having travel insurance, leading to a surge in demand for products that offer COVID-19 coverage. With the availability of attractive insurance plans and the adoption of digital platforms, the travel insurance market is poised for substantial expansion.” – ResearchAndMarkets.com
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