The aging population and increasing globalization have underpinned growth in the underlying travel market
New York, NY (PRWEB) July 03, 2014
The Travel Insurance industry provides trip protection, personal effects protection, emergency medical coverage and other types of specialized coverage for travel risks. Over the past five years, the aging population and increasing globalization have underpinned growth in the underlying travel market. This is because individuals aged 50 and older purchase the most travel insurance, primarily for international trips. According to IBISWorld Industry Analyst Leah Goddard, “The recession and associated turmoil in the international airline industry boosted demand for travel insurance in 2010 as consumers were more sensitive to protecting their travel investments due to higher risk of flight cancellations and delays.” Moreover, the growing frequency and severity of natural disasters have prompted more consumers to purchase travel insurance to protect themselves against potential losses resulting from a catastrophic event. For these reasons, over the five years to 2014, IBISWorld estimates that industry revenue will rise at an annualized rate of 1.2% to $2.5 billion.
Despite these positive trends, oil prices have increased at a faster rate than disposable incomes since the recession, raising transportation costs for consumers. According to Squaremouth, a leading travel insurance comparison site, the average trip cost for individuals purchasing travel insurance has increased from $4,417.80 in 2009 to $4,970.70 in 2012, the latest year of available data. Moreover, the average premium for travel insurance has risen from $224.30 in 2009 to $276.40 in 2012. “Since travel insurance is a discretionary purchase, rising transportation costs amid stagnating disposable incomes have dampened revenue growth over the period, leading revenue to marginally rise 0.7% in 2014,” says Goddard.
Over the five years to 2019, IBISWorld estimates that revenue for the Travel Insurance industry will rise. Improving disposable income levels and favorable demographic and globalization trends will drive growth in revenue over the period. In addition, the increased frequency and severity of natural disasters resulting from climate change are expected to boost consumer demand for travel insurance. Furthermore, growth in online and mobile distribution channels and niche travel markets, such as the US study abroad and frequent business traveler markets, will also bolster demand and thereby revenue for the Travel Insurance industry.
For more information, visit IBISWorld’s Travel Insurance in the US industry report page.
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IBISWorld industry Report Key Topics
The Travel Insurance 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
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