Increasing demand for travel insurance in India - 2023

Increasing demand for travel insurance in India

The COVID-19 pandemic has had a profound impact on the travel industry, prompting many travelers to rethink their plans and prioritize safety and security above all else. As a result, there has been a significant increase in demand for travel insurance in recent months, as travelers seek to protect themselves against unexpected events and travel disruptions.

According to industry experts, the pandemic has led to a significant shift in consumer behavior when it comes to travel insurance. Many travelers are now more aware of the potential risks and uncertainties involved in travel, and are more likely to invest in comprehensive travel insurance policies that provide coverage for a range of issues, including trip cancellations, medical emergencies, and lost or stolen baggage.

One of the primary reasons for this increased demand is the uncertainty surrounding travel during the pandemic. With travel restrictions and quarantine requirements changing frequently and unpredictably, many travelers are seeking extra protection and peace of mind in case their plans are disrupted.

Another factor driving the trend is the growing popularity of adventure travel and experiential tourism, which often involves more risk and potential hazards than traditional leisure travel. As more travelers seek out unique and off-the-beaten-path experiences, travel insurance is becoming increasingly important as a way to mitigate the risks associated with these types of trips.

In response to this growing demand, many travel insurance providers have expanded their offerings to include more comprehensive and flexible policies that cater to the needs of modern travelers. Some providers are also offering specialized coverage for COVID-related issues, such as medical expenses and trip cancellations due to the pandemic.

Overall, the trend towards increasing demand for travel insurance is likely to continue in the post-pandemic era, as travelers prioritize safety and security in their travel plans. While travel insurance may add an extra cost to a trip, many travelers are willing to pay the price for the peace of mind and protection it provides.

Travel and tourism sector’s contribution to India’s GDP

Following the epidemic, the travel and tourism industry was still reeling from the effects of the lockdown. This has resulted in a huge fall in demand and revenue, affecting the country's GDP directly. The tourism sector in India contributed 8.8% to GDP in 2019, but this is expected to fall to 8.2% in 2020. This is a considerable drop, especially for such an important component of the country's economy. Yet, after two years of unpredictability in travel, there has been a significant increase in demand for travel insurance, for a variety of reasons

India's economy is quickly expanding, and more individuals can now afford to travel overseas for recreation or business. According to an leading insurance company in india, demand for travel insurance policies grew in FY21-22 compared to FY19-20. As a result, there is a greater need for travel insurance to safeguard against unanticipated events such as medical emergencies, aircraft cancellations, and lost or stolen luggage. Travel insurance not only provides passengers with peace of mind, but it also contributes to India's GDP. The travel insurance market in India is developing at a CAGR of 17.65% and is expected to be worth USD 892.29 million in 2022. It is also predicted to reach USD 11.25 million by 2027.

Furthermore, the internet has made it simpler for travelers to evaluate several travel insurance packages and choose the best offer for their needs. This has made it easier for consumers to obtain travel insurance, contributing to growing demand.

Reviving the tourism industry with the Union Budget 2023

The travel and tourism business in India contributed around 178 billion US dollars to the country's GDP in 2021. Nonetheless, India's travel insurance sector accounts for less than 1% of the global travel insurance industry.

The Government Budget 2023 makes an excellent attempt to develop India's travel industry, investing an amazing Rs. 2400 crore to the tourist sector. It's encouraging to see the administration make tourism a priority. Finance Minister Nirmala Sitharaman has also urged that states participate actively and form public-private partnerships to advance tourist development. This is a move in the right way that will undoubtedly benefit the industry.

The Indian government has devised a challenge-based strategy for selecting at least 50 venues around the country. Reviving 50 more airports, helipads, water aero drones, and advanced landing areas will increase regional air connectivity. This will have a significant impact on domestic travel and tourism. Furthermore, the government is approaching the issue holistically, focusing not only on hard infrastructure, such as physical connectivity, but also on softer issues, such as travel agent quality and visitor safety.

The travel and tourism business will expand swiftly if the proper legislation and policies are in place. This is not only good for the industry, but it is also encouraging more investment in the travel insurance industry. This is a significant boon to India's economy, as it contributes to the country's GDP and overall growth.