India Travel Insurance Market: Current Analysis and Forecast (2024-2032)

Travel insurance is a unique form of insurance that is intended to guard a man against numerous risks that might occur physically while traveling. This can include ticket and trip cancellations, medical evacuations, misplaced or lost luggage, and entrapment and delays. The current advancement in travel Insurance in India: The market for travel insurance in India is increasing continuously due to factors such as an increase in outbound tourism, rising awareness of the numerous risks, related to travel, and the ever-growing influence of COVID-19 which has leading many travelers to be more cautious while traveling. Products and services policies are assuming online formats thus enabling easier comparison and purchase. Airlines are also giving the clients the option to choose from a range of insurance policies that will suit them depending on their needs; be it an adventurous one, or a family one among others. However, gaps are still there like poor awareness of a few segments, hurdles to come under the policy and understanding them and claims processes.

The India Travel Insurance Market is expected to grow at a steady rate of around 13.7% owing to the rising insurance scheme launch. For instance, in March 2024, TATA AIG General Insurance, which accounts for nearly a third of the country's overseas travel insurance premium, launched 'Travel Guard Plus', a travel insurance plan that provides coverage for up to one year through multiple or single trips. Moreover, increasing travel activity, rising awareness and education, and regulatory support from the government are anticipated to boost the Indian travel insurance market.

Based on coverage type, the market is segmented into single-trip insurance, multi-trip insurance, and long-stay insurance. The single-trip insurance dominated the market in the year 2023 as travel of the Indian customers is short and they mostly prefer single-trip insurance. Most people be it for business or for tourism sometimes opt to make single trips as opposed to having to make multiple trips in the year. This trend is especially apparent where people do not take long holidays and travel locally as well as where travelers need travel insurance for particular trips overseas. Single-trip policies are also more cost-effective than multi-trip schemes because the cover given is a one-off insurance policy - as against several yearly policies- which most travelers prefer. This suggests that single-trip insurance is also going to be one of the main contributors to the overall sales growth of travel insurance in India as the travel environment progresses. Thus, the single-trip insurance segment dominated the market in the year 2023.

Based on destination type, the Indian travel insurance market is segmented into domestic travel and international travel. The domestic travel segment caters significant segment of the Indian travel insurance market as the domestic travel insurance segment is a large buyer of policies in India. There is a large middle class, rising disposable incomes, and a lot more, and better promotions for domestic travel, and better rail/road connectivity, more people are now traveling within India. This increase in domestic traffic is similarly accompanied by the increasing sensitivity of travelers to risk in their travels, including trip cancellation, medical necessity, and weather calamities. Insurers are adjusting to their client's needs by developing insurance policies for domestic travel, local travel, family trips, and traveling to adventurous destinations. Since there is a trend now that people are opting for traveling to a lot of places in India itself the domestic travel category is expected to be a strong pillar in the travel insurance market following the shift also in consumers' behavior and trends in traveling. Thus, destination type held a significant share of the market in the year 2023.

Based on the distribution channel, the Indian travel insurance market is segmented into online and offline. The offline segment caters significant segment of the Indian travel insurance market as it caters to travelers who are in search of a more personal touch or service, and who want to communicate and discuss their insurance plans face-to-face. This is particularly true for most end-users where the over sixty-five age group and those with a lower level of tech-savviness are frequent users of conventional distribution channels like agents, brokers, and brick-and-mortar insurance firms. This preference arises out of the necessity for professional service providers in policy requirements, coverage, and claims management. Also, agents are usually able to use their knowledge to give specific advice oriented to the client's plan, which helps to build the client's confidence. It is also pertinent to say that the offline division remains unignorable, especially for reaching a wider audience as well as for building consumers' trust in travel insurance. In the long run, there is the possibility of the formation of a combination of offline and online services as being effective for the insurers as the market advances. Thus, online held a significant share of the market in the year 2023.

For a better understanding of the market adoption of Indian travel insurance, the market is analyzed based on its state-wise presence in India such as North India, East India, West India, and South India. The travel insurance market in north India is growing at a fast pace due to growing disposable income, the fastest-growing domestic and international travel, and customers' awareness of travel risks. Parts of the country including Delhi, Punjab, and Haryana have also reported an increase in traveler traffic with both leisure and business trips hence exposing them to the need to insure. This part of the city also experiences higher traffic because of schools and business establishments which are related to educational institutions and corporate businesses. In this part of the city there is also a higher traffic movement due to the needs of students and business individuals in the course of their pursuit for education or carrying out of their business activities. Further, there are emerging activities performed by insurers thus enhancing consumer awareness of travel insurance and easing procedures of the purchase. Thus, north India is growing at a significant rate in the Indian travel insurance market.

Some of the major players operating in the market include Tata AIG General Insurance Company Limited; HDFC ERGO General Insurance Company Limited; Bajaj Allianz General Insurance Co. Ltd; SBI General Insurance; Reliance General Insurance Company Limited; Royal Sundaram General Insurance Co. Limited; Cholamandalam MS General Insurance Company Ltd.; Acko Group; ICICI Lombard General Insurance Company Ltd.; Niva Bupa.