The world of travel is changing, and not always for the better. We’re seeing more and more disruptions – everything from flights getting rerouted to airports jammed up because of bad weather, not to mention software problems and too few air traffic controllers. Because of all this, travelers are reconsidering how they approach their trips, and are increasingly interested in travel insurance that meets their evolving needs. Businesses, too, are looking for ways to manage the risks involved.
InsureMyTrip, a US-based broker, mentioned a considerable increase (32%) in global insurance quote requests between January and April of 2025 compared to the same period the year before. Separately, Allianz Partners reported a slightly more modest increase (3%) in European subscriptions for the summer of 2025. According to Anna Kofoed, CEO of Allianz Partners’ Travel segment, vacationers from Britain and America are showing a greater willingness to spend a bit more for better coverage.
Rising Popularity of “Cancel For Any Reason”
As travel disruptions become more common, standard insurance policies just aren’t cutting it anymore. Take, for example, the chaos at Newark Liberty Airport back in May – air traffic controller shortages coupled with aging infrastructure caused lots of cancellations and delays due to both equipment problems and runway maintenance. Squaremouth saw a 34% leap in purchases of “Cancel For Any Reason” (CFAR) insurance, which gives travelers refunds regardless of their reason for canceling their trip. The recent Middle East conflict, specifically between Israel and Iran, messed with flights, highlighting gaps in standard policies and pushing people to seek more flexible options given the unpredictable times.
Parametric Insurance Emerges
One interesting new trend is parametric insurance. It offers automatic payouts for specific events, like flight delays or rough weather, and doesn’t require a ton of paperwork. Marriott Bonvoy now offers weather insurance for their water parks, and Sensible Weather has reported a pretty good uptick – 30% – in theme park bookings, and somewhere between 10 and 15% in premium accommodations in 2024 when the weather insurance option was available.
Business Travel Risk Management
Companies are also making adjustments. There’s been a noticeable surge – around 50% – in requests for risk consultation since November of 2024, especially for travel within the US. This is largely because of the complicated visa and customs situation, set against the backdrop of changing global politics.
A Shift Toward Sustainability
While the premium travel insurance market still only accounts for a relatively small slice of overall sales, its increasing popularity indicates a greater overall awareness of travel risks. As hurricanes, snowstorms, and air traffic problems become more commonplace, both travelers and businesses are prioritizing planning and preparation, which is ultimately changing the insurance landscape to better suit our unpredictable world.