The Travel Insurance industry exhibits a low level of market share concentration. The top four industry operators are expected to account for less than one-fifth of total industry revenue. The industry's fragmentation is attributable to its numerous distribution channels and niche, localized operators. Suppliers to the industry include data management firms and institutional investment managers with the total number of industry suppliers ranging in the low thousands. The leading provider of travel insurance is American International Group Inc. (AIG) through its Travel Guard Brand.
Moderate barriers to entry and low capital intensity drive competitive landscape
· The industry landscape is conducive to numerous small-to-midsize operators that depend on well-established distribution networks. The fragmentation and variation among these distribution networks (i.e. travel agencies and online travel websites) largely inhibits the development of major players, or companies that command 5.0% or more of industry market share.
Insurance regulations result in regulatory compliance costs
· Travel insurance is regulated at the state level, and insurers are incentivized to attain accreditation from the National Association of Insurance Commissioners. Travel insurance companies are required to adhere to the regulations of the jurisdiction they sell travel insurance, thus causing moderate-to-high regulatory compliance costs.
This industry underwrites (i.e. assumes, pools and spreads out risk of financial losses over policyholders in exchange for premiums) travel insurance policies. Coverage can include losses from trip cancellation and delay, lost baggage and medical emergencies.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.
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