US Travel Insurance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

Revenue for the Travel Insurance market in United States declined an estimated 71.5% in 2020 due to a sharp decrease in travel activity amid the COVID-19 pandemic. In 2021, younger consumers are generating a higher share of revenue for the industry than normal as older consumers are more reluctant to travel amid the pandemic. The pandemic has led individuals who are traveling to take out travel insurance policies more frequently than before the pandemic, highlighting a potential opportunity for the market moving forward.

The United States residents travelling to international destinations for business or leisure purposes are the primary source of demand for travel insurance. Advancements in aircraft technology have made air travel safer and less costly, prompting more US residents to take leisure trips abroad and purchase travel insurance to protect their travel investment. In addition, the increased globalization of markets and corporate supply chains have driven the need for business travel. The number of international trips by US residents is expected to increase during forecast period, representing a potential opportunity for the industry.

The travel insurance industry exhibits a low level of market share concentration. The top four industry operators are expected to account for less than one-fifth of total industry revenue. The industry's fragmentation is attributable to its numerous distribution channels and niche, localized operators. Suppliers to the industry include data management firms and institutional investment managers with the total number of industry suppliers ranging in the low thousands. The leading provider of travel insurance is American International Group Inc. (AIG) through its Travel Guard Brand.

Travel insurance in United States is regulated at the state level, and insurers are incentivized to attain accreditation from the National Association of Insurance Commissioners. Travel insurance companies are required to adhere to the regulations of the jurisdiction they sell travel insurance, thus causing moderate-to-high regulatory compliance costs.

Scope of the Report

The report offers a complete background analysis of the Travel Insurance Market, which includes an assessment of the emerging market trends by segments, significant changes in the market dynamics, and the market overview. The US Travel Insurance Market is segmented by Type (Single-Trip Travel Insurance, Annual Multi-Trip Travel Insurance), by Distribution Channel (Insurance companies, Insurance Intermediaries, Banks, Insurance Brokers, Others), by End User (Senior Citizens, Education Travelers, Business Travelers, Family Travelers, Others).

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Key Market Trends

Americans Spending on Travel Insurance is Driving the Market

In 2020, Americans spent approximately USD 1.72 billion on all types of travel protection. According to industry estimates, more than 45% of the American population is currently more concerned while travelling than they were in the past, owing to the spread of epidemic disease, rise in terrorist attacks, and severe weather conditions. Travel insurance policies are widely opted for by frequent travellers, well-educated groups, and individuals with high disposable income. Moreover, the number of overseas travellers, who opt for travel insurance is large in number as compared to domestic travellers. This growth is largely subject to a rise in multigenerational family travel, which supplements the growth of the US travel insurance market. Moreover, these travellers opt to travel for long weekend trips and try to secure their travel from various concerns related to theft and health hazards.

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