The travel insurance market is seeing rapid growth in 2025, driven by rising global tensions, unpredictable weather, and increasing travel disruptions. Travelers and companies alike are rethinking how they plan and protect their journeys. With more delays, cancellations, and route changes, insurance policies are no longer a luxury—they are becoming essential.
In early 2025, one U.S.-based broker, InsureMyTrip, reported a 32% increase in worldwide travel insurance quote requests compared to the same months in 2024. In Europe, Allianz Partners noted a smaller but steady 3% rise in travel insurance subscriptions for the 2025 summer season. The trend shows that both casual vacationers and business travelers are seeking stronger, more flexible coverage.
According to travel insurance executives, people from the United Kingdom and the United States are now more willing to pay extra for policies that better reflect today’s risks. Their focus is shifting from basic coverage to advanced options that offer greater security and flexibility.
One such growing option is “Cancel For Any Reason” (CFAR) coverage. This policy allows travelers to cancel their trips for any reason and still receive a refund. Squaremouth, another travel insurance provider, saw a 34% jump in CFAR purchases in recent months. This surge was linked to ongoing disruptions like the May 2025 delays at Newark Liberty Airport. Staffing shortages, outdated infrastructure, and runway repairs led to many flight cancellations, pushing more travelers toward policies that offer more freedom and less hassle.
Geopolitical tensions are also influencing the market. The recent conflict between Israel and Iran led to multiple international flight disruptions, creating a wave of cancellations and rebookings. These events exposed the limitations of traditional travel insurance and pushed many people to consider broader, more reliable protection.
A newer product gaining ground is parametric insurance. It’s simple and fast. This type of coverage automatically pays out when certain conditions are met, like flight delays or severe weather, without requiring long claims processes. It’s already being used by brands such as Marriott Bonvoy, which offers weather insurance for its water parks. Sensible Weather, a parametric insurance provider, saw a 30% rise in theme park bookings and a 10–15% increase in luxury hotel stays in 2024 when their product was included in the travel package.
The corporate world is also reacting to the shifting landscape. Business travel is facing new levels of risk. Since November 2024, there has been a 50% increase in companies requesting travel risk consultation services. Many of these cases involve U.S. domestic trips, where evolving customs and visa regulations are causing uncertainty. Changing global politics adds another layer of complexity, making risk planning a key part of corporate travel policies.
At the same time, there is a subtle but growing focus on sustainability in travel insurance. While premium and eco-conscious policies still represent a small share of the total market, their rising popularity suggests a long-term shift. Travelers are increasingly aware of climate-linked events like hurricanes and snowstorms, which disrupt travel plans and create financial losses. As a result, both individuals and companies are investing in more thoughtful, flexible insurance solutions.
All these shifts are shaping a new reality for the travel insurance market. Policies are no longer just about illness or trip cancellation. They now need to cover a much wider range of potential issues, from political unrest to weather extremes. Flexibility, speed, and reliability have become top priorities.
With demand on the rise, insurers are adjusting their offerings. Companies are expanding their product lines, improving online claim processes, and integrating new tech to track and respond to real-time risks. These efforts reflect a deeper understanding of what modern travelers face—and how insurance must evolve to meet those challenges.
As travel continues to rebound post-pandemic, and with more people venturing abroad for work and leisure, the need for smarter travel protection is only expected to grow. The travel insurance market, once a quiet part of the travel industry, is now front and center in helping people feel safe in an unpredictable world.
