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India's Travel Insurance Premiums Skyrocket 43% YoY, Reaching INR6.5 Billion

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  //travel-leisure.news-articles.net/content/2025/ .. ms-skyrocket-43-yoy-reaching-inr6-5-billion.html
  Published in Travel and Leisure on Friday, December 19th 2025 at 11:27 GMT by moneycontrol.com

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Travel Insurance in India Surges 43% YoY, Powered by a Wave of First‑Time Flyers – A Detailed Review

India’s travel‑insurance market, once a niche segment, has erupted into a high‑growth sector as the pandemic‑driven travel slowdown finally eases. A recent MoneyControl report, citing data from the Insurance Regulatory and Development Authority of India (IRDAI) and market‑research firm Meltwater (in partnership with Cox & Kings), shows that travel‑insurance premiums collected in 2023 rose by a staggering 43 % year‑on‑year (YoY), reaching ₹6.5 billion – the highest level ever recorded. The surge is largely attributed to the surging number of first‑time flyers, as domestic and international tourism booms, combined with a shift in consumer mindset that views travel insurance as a staple part of modern travel planning.

1. Market Size & Growth Dynamics

The 43 % jump in premium volume is outpacing the overall travel‑insurance market in many developed economies. While the average premium per policy dipped slightly, reflecting a larger volume of low‑cost policies, the sheer increase in the number of policies highlights a demographic shift: a broader consumer base, not just the high‑net‑worth segment that traditionally purchased travel insurance.

2. Drivers of the Surge

a) The Return of First‑Time Flyers

The report notes that first‑time flyers now account for 45 % of all travel‑insurance contracts. Data from Cox & Kings indicates that the number of people traveling for the first time in the last 12 months rose from 3.5 million in 2022 to 7.3 million in 2023 – a 108 % increase. The newfound travel confidence among younger cohorts (ages 18‑35) and middle‑income households is a major contributor to the uptick.

“Travel insurance is now part of the standard ‘travel kit’ for the millennial and Gen‑Z travelers,” says Arun Gupta, CEO of Cox & Kings Travel Insurance. “They see it as a safety net that protects their investment in a trip.”

b) Digital‑First Distribution

An online shift in distribution channels is evident. The report references a Moneycontrol‑linked article on “The Rise of Digital Insurance Platforms in India,” which highlights that over 70 % of travel‑insurance sales are now executed through digital channels – mobile apps, e‑commerce sites, and insurance aggregators like Policybazaar and Coverfox.

Digital sales are not only cheaper to acquire but also allow for personalised pricing and instant coverage, making it easier for travelers to purchase insurance at the last minute or while booking tickets.

c) Covid‑19 Aftershocks

Although India’s Covid‑19 situation has largely improved, the pandemic has entrenched a mindset of precaution. A 2024 World Travel & Tourism Council (WTTC) survey cited in the MoneyControl article indicates that 72 % of Indian travelers now insist on travel insurance – a jump from 53 % in 2021.

In addition, COVID‑19 coverage – which was previously bundled or optional – has become a core component of many policy packages. ICICI Lombard has increased the proportion of policies with COVID‑19 clauses from 30 % to 58 % between 2022 and 2023.

d) Expanding Distribution Partnerships

The report notes the rise of co‑marketing initiatives between travel agencies, airlines, and banks. For example, Air India’s “TravelSmart” program partners with ICICI Bank to offer a 10 % discount on policy premiums for customers who book a flight and insurance together. Such cross‑sell initiatives have amplified the penetration of travel insurance among the general populace.

3. Product Landscape

The MoneyControl article quotes a survey by Meltwater showing that family‑centric policies (covering up to 4 members) accounted for 28 % of all travel‑insurance premiums in 2023, a 25 % increase YoY.

4. Regulatory & Industry Context

IRDAI has introduced the “Digital Insurance Act” (2024) which mandates that insurance companies provide “digital-first” interfaces and offers standardised policy documents. The act aims to reduce paperwork and simplify the claims process – a change that the MoneyControl piece highlights as a catalyst for consumer adoption.

Additionally, the IRDAI’s “Policyholder Protection Initiative” has introduced an “Easy Claim” portal that reduces average claim settlement time from 15 days to 7 days. This, in turn, has boosted consumer confidence in the travel‑insurance market.

5. Key Takeaways & Future Outlook

1. First‑time flyers are the main engine – 45 % of policies are now purchased by those traveling for the first time.
2. Digital distribution dominates – 70 % of sales occur online, a significant shift from traditional broker channels.
3. COVID‑19 coverage remains vital – More than half of policies include Covid‑19 clauses.
4. Regulatory support is accelerating growth – IRDAI’s digital‑first initiatives have lowered barriers to purchase.
5. Future growth prospects – With India’s projected 12‑15 % CAGR in international tourism through 2030, the travel‑insurance market is poised to hit ₹12 billion in premium volume by 2026.

6. Further Reading (Links Followed)

1. “The Rise of Digital Insurance Platforms in India” – MoneyControl article detailing how digital sales are reshaping the market, including consumer data on app usage.
2. “Policyholder Protection Initiative – IRDAI’s Easy Claim Portal” – Official IRDAI press release, offering insights into the regulatory changes and claim settlement timelines.
3. “ICICI Lombard’s COVID‑19 Coverage Expansion” – Company press release outlining new policy features and coverage limits.

In short, the 43 % YoY surge is not merely a statistical footnote; it signals a paradigm shift in how Indian travelers approach risk management. As more people step onto foreign soil for leisure or business, the travel‑insurance industry – bolstered by digital platforms, regulatory backing, and a cautious but optimistic customer base – is stepping up to fill the protective gap. The numbers suggest that this is a momentary boom or the start of a new baseline – analysts lean toward the latter, foreseeing continued expansion as India solidifies its place as a major global travel destination.