Whalesbook
Indian Travelers Choose Stronger Protection
Indian travelers bought 22% more travel insurance in the past year, showing a growing awareness of risks. This growth, reported by Policybazaar.com, signals a shift from simply planning trips to actively managing risks. Data shows travelers are moving beyond basic policies, with demand for coverage over $250,000 doubling. This increase is linked to worries about rising medical costs, possible evacuation expenses, and global instability. Medical coverage is the most popular choice, chosen by about 75% of travelers. Trip cancellation (nearly 50%) and evacuation (around 40%) are also key. Coverage for flight delays and disruptions is also becoming more popular.
Shifting Destinations: Asia Takes Center Stage
Travelers are increasingly choosing closer international destinations, especially in the Asia-Pacific region. Japan led this trend with a 17% increase in bookings, followed by Thailand (12%) and Vietnam (7%). Singapore and Malaysia saw steady demand, with Sri Lanka becoming a popular budget-friendly choice. This focus on nearby, more affordable Asian destinations is a result of higher airfares and airspace issues affecting long trips to Europe and the U.S. Meanwhile, travel to the UAE dropped by over 70%, likely due to regional tensions and safety worries. As travel costs have risen an estimated 20-25%, Indian consumers are adjusting their plans to favor shorter trips and nearby destinations over more expensive journeys. This shift is also seen in more cancellations (up 32%) and a trend towards booking trips closer to the departure date.
Higher Coverage Amounts: Seeking Full Protection
Travelers are not only changing destinations but also opting for higher levels of insurance coverage. The doubling in demand for coverage exceeding $250,000 shows growing concern about unexpected medical bills and accessing healthcare abroad. This aligns with the view that travelers now see insurance as essential protection against medical emergencies and global risks. Increased demand for trip cancellation and evacuation cover further supports this, as travelers aim to protect their money and health amid global uncertainties.
Market Snapshot: Key Players and Growth
Policybazaar.com, the source of this data, is India's top digital insurance marketplace, holding a 93% market share and serving 77 million users. Its parent company, PB Fintech, was valued at approximately ₹76,344 crore in May 2026. The travel insurance market is competitive, with players like ICICI Lombard. ICICI Lombard has a strong solvency ratio of 2.67x and offers various travel plans. Customer experiences with ICICI Lombard differ, with some praising its service and others reporting issues with claims. Other key companies include Go Digit, trading at a high P/E ratio of 51.5x-55.29x, potentially indicating it's overvalued compared to rivals. Acko General Insurance, a digital-first insurer, became a unicorn with a $1.1 billion valuation in 2021. The Indian travel insurance market is expected to grow significantly, with projections varying from a 10.43% annual growth rate to reach $2.12 billion by 2031, to a 16.95% annual growth rate to reach $6.64 billion by 2034.
Challenges and Risks Ahead
Despite the strong growth in insurance purchases, there are significant underlying risks. Rising airfares (up 38% domestically and 13% internationally between H1 2019 and H1 2025) and general inflation could reduce spending on non-essentials, affecting budget travelers' insurance choices. Intense competition among insurers could squeeze profit margins. Policybazaar's model relies on volume, but individual insurers face profitability challenges. For example, ICICI Lombard shows strong growth but struggles with underwriting profits, especially in areas like motor insurance. Relying heavily on popular Asian destinations also makes the market vulnerable to regional instability or policy shifts, as shown by the sharp drop in UAE travel. Low insurance uptake in smaller cities and the view that insurance is an unnecessary expense are ongoing issues. Geopolitical events or economic downturns could cause consumers to prioritize essential spending, lowering the perceived value of travel insurance.
What's Next for Travel Insurance
The Indian travel insurance market is set for continued growth, fueled by an increasingly connected but unpredictable world. Analysts expect steady double-digit growth this decade. This is driven by rising incomes, changing traveler expectations, and the ongoing need for financial security amid global uncertainties. Digital platforms will remain key for easy access and policy comparison, making insurance available to more people. However, the market's future growth depends on navigating economic challenges, managing competition, and clearly showing the essential value of strong travel protection in a volatile world.