The landscape of international travel has been permanently altered by a rising tide of disruptions ranging from natural disasters to geopolitical tensions. As traditional policies fall short, demand for premium travel insurance products has spiked significantly across both leisure and business sectors. According to data and insights from insurance platforms, analysts, and travel executives, travelers are opting for more comprehensive, higher-cost coverage to mitigate growing risks.
Global Turbulence Fuels Insurance Uptick
Since 2019, the travel industry has weathered one crisis after another—from the COVID-19 pandemic and volcanic eruptions to air traffic control failures, cyber incidents, military conflicts, and natural calamities. In May 2025 alone, widespread delays and cancellations plagued Newark Liberty International Airport, one of New York City’s major aviation hubs, due to equipment failures, staffing shortages, and runway reconstruction.
More recently, a military escalation in the Middle East caused by Israeli airstrikes on Iran forced international airlines to reroute or cancel thousands of flights, further underscoring the volatile environment travelers now face. These episodes illustrate a persistent pattern of uncertainty that is prompting holidaymakers to re-evaluate how they insure their trips.
“These are unstable times. People are cancelling trips more frequently than before,” noted Duncan Greenfield-Turk, CEO of London-based luxury travel agency Global Travel Moments. “As a result, they are seeking tailored insurance plans that offer better coverage and peace of mind.”
Surge in Premium Insurance Purchases
The response from the travel community has been decisive. U.S.-based insurance aggregator Squaremouth reports a 34% year-over-year rise in purchases of “Cancel For Any Reason” (CFAR) policies. InsureMyTrip, another leading online broker, revealed a 32% increase in insurance quote requests globally between January and April 2025 compared to the same period in 2024.
European markets are witnessing similar trends. German insurance giant Allianz Partners highlighted a 3% year-on-year increase in travel insurance purchases by European tourists this summer. Notably, British and American tourists are showing the greatest willingness to invest in high-end protection, according to Allianz’s CEO of Travel, Anna Kofoed.
Business Travelers Seek Expert Risk Guidance
The travel insurance boom is not limited to tourists. Corporations are increasingly turning to expert advisory services to navigate shifting political landscapes and immigration policies. World Travel Protection (WTP), a leading travel risk management firm, reports a significant uptick in inquiries from companies concerned about U.S. travel after former President Donald Trump introduced stricter immigration regulations and visa policies.
“There’s been a rise in U.S. residents being detained at borders due to documentation no longer aligning with new visa standards,” said Frank Harrison, WTP’s Regional Security Director for the Americas. “We’ve worked closely with government entities to get these travelers home safely.”
Visa and immigration consulting firm CIBT corroborates this trend, noting a 50% surge in business inquiries since November 2024. Companies are proactively seeking expert advice to ensure employee mobility isn’t hindered by shifting regulatory environments.
The Rise of Parametric Insurance Products
A notable development in the evolving travel insurance ecosystem is the growing popularity of parametric insurance—a model that offers instant compensation when a pre-defined trigger event, such as a flight delay or bad weather, occurs.
First gaining traction during the COVID-19 era, parametric insurance has found new relevance in today’s disruption-prone climate. Spanish insurer Mapfre’s Mawdy unit tested this offering in Ireland, reporting an 11% increase in customers choosing higher-tier packages when instant payouts were included.
Travel industry leaders are also capitalizing on this trend. Marriott Bonvoy’s villa rentals and waterparks have begun offering weather-based parametric insurance, reimbursing travelers automatically for rainy days without the hassle of filing claims. One of their insurance partners, Sensible Weather, stated that weather coverage was added to 30% of theme park bookings and 10–15% of premium accommodation reservations in 2024.
Squaremouth recently introduced a specialized cruise insurance product that covers unique scenarios such as being confined to a ship or missing a port of call—addressing highly specific concerns that standard policies overlook.
Insurance Innovation Meets Consumer Awareness
Insurance executives acknowledge that travel is no longer a one-size-fits-all affair. “Every trip now involves its own unique risks—be it hurricanes, blizzards, or geopolitical conflict,” said Suzanne Morrow, CEO of InsureMyTrip. “We’re trying to simplify decision-making for travelers while offering the most targeted protection possible.”
As the world continues to grapple with unpredictable climate events, socio-political unrest, and infrastructure shortcomings, the travel insurance sector is undergoing a transformation. The push for innovation, customization, and simplicity is ushering in a new era of consumer-focused, responsive insurance models.
Whether embarking on a luxury cruise, a corporate mission, or a once-in-a-lifetime adventure, travelers are increasingly aware that premium insurance is no longer optional—it’s essential.
For more travel news, follow Global Travel Wire.
Original article was published by The Reuters.
Disclaimer:
This image is AI-generated and created for illustrative purposes only. It may not accurately represent the actual events, individuals, or locations described in the news article.
