Consumers are more likely to protect their travel investment, boosting industry demand
Los Angeles, CA (PRWEB) April 24, 2012
The US Travel Insurance industry provides trip protection, personal effects protection, emergency medical coverage and a multiple of specialized coverages for travel risks US consumers face. Over the five years to 2012, IBISWorld estimates industry revenue to grow at a 1.6% average annual rate to $2.7 billion. “An aging population, increased globalization of markets and rising consumer disposable income underpinned growth in the underlying travel market each year, with the exception of 2009,” says IBISWorld industry analyst Doug Kelly. The recession from 2008 to 2009 caused consumer discretionary spending and, therefore, consumer spending on travel to plummet. As a result, industry revenue growth slowed in 2008 before declining in 2009. Industry revenue returned to growth in 2010 and 2011. The recession and associated turmoil in the international airline industry boosted demand for travel insurance: consumers were more sensitive to protecting their investments in travel expenditures due to higher risk of flight cancellations and delays.
The Travel Insurance industry has a low level of market share concentration. In 2012, the top companies are AIG and the American Express Company. Industry concentration has increased over the past five years because many consumers viewed travel insurance as an extra cost and, consequently, did not purchase this insurance. As consumer disposable income increases, and purchases of vacations and travel insurance increase, more companies will enter the industry, lowering market share concentration.
Over the five years to 2017, IBISWorld estimates US Travel Insurance industry revenue will rise. This growth will be closely linked to continued growth in consumer disposable income and the continuation of favorable demographic and globalization trends. “In addition, the increased frequency and severity of natural disasters resulting from climate change are expected to increase the percentage of overall trips US residents choose to insure with travel insurance,” continues Kelly. Growth in online and mobile distribution channels and niche travel markets, such as the US study abroad and frequent business traveler markets, will also provide a boost to the travel insurance industry. For more information, visit IBISWorld’s Travel Insurance report in the US industry page.
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IBISWorld industry Report Key Topics
This industry underwrites (i.e. assumes, pools and spreads out risk of financial losses over policyholders in exchange for premiums) travel insurance policies. Coverage can include losses from trip cancellation and delay, lost baggage and medical emergencies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.