Whalesbook
Travel Insurance Uptake Soars in India on Rising Costs and Risk Awareness
CHENNAI – Overseas travel insurance uptake among Indian outbound travelers has nearly doubled in six years, moving from optional to essential. Data from the Insurance Regulatory and Development Authority of India's (Irdai) annual report shows 96.7 lakh lives covered under 27.9 lakh policies in fiscal year 2024-25, generating Rs 1,267 crore in gross premiums.
This surge represents a 91% increase in lives covered and a 67.4% rise in premium income since FY19. Private general insurers' market share grew from 81% to 84% during this period, underscoring their dominance.
Key Drivers: Medical Costs and Disruptions
Rising medical costs abroad, potentially five to eight times higher than in India, are a primary concern. Post-pandemic, heightened awareness of travel disruptions—such as flight delays and cancellations—also amplifies the financial impact, driving travelers to seek protection. Policybazaar notes a clearer understanding of risk among Indian travelers.
Leisure travelers lead demand, but business travelers, students, and professionals on assignments also seek coverage. Notably, senior citizens are a growing segment, driving demand for specialized medical and emergency assistance plans, according to Asego.
360° Investment Research Analysis
Bullish: Insurers with strong international travel portfolios stand to gain from higher premiums and customer loyalty. Private players are capturing growing market share, rewarding service quality and innovation.
Bearish: Increased travel volume could lead to higher claims, pressuring profitability if not priced correctly. Geopolitical or health crises could abruptly halt travel, impacting revenue. Intense competition may compress margins.
Skeptical: The sustainability of the 91% growth post-pandemic requires scrutiny. It's vital to differentiate voluntary risk mitigation from mandatory visa requirements (e.g., Schengen). Claims ratio trends need close monitoring.
Data-Driven: The higher growth in lives covered (91%) versus premiums (67.4%) suggests a rise in average premiums per policy, indicating comprehensive coverage choices. Modest policy count growth implies larger group/family policies are contributing.
Market Context and Outlook
This trend mirrors the strong revival in outbound travel, with Indian departures increasing 14.7% from 2019 to over 3 crore in 2024. The Indian Association of Tour Operators sees travel insurance growth as a direct outcome of this resurgence. As more destinations require it for visas, and travelers prioritize security, overseas travel insurance is solidifying as a standard component of international trip planning, reflecting a maturing Indian traveler market.