With flight cancellations, delays and other disruptions on the rise, leisure travelers are being increasingly discerning over the level and type of insurance they buy and businesses are turning to specialist advisory services to limit risk.
Since 2019, travel disruptions around the world have risen due to everything from COVID-19, extreme weather, volcanic eruptions, military conflict, jet safety issues, computer glitches and fires which have closed airports, grounded planes and stranded millions of passengers.
In the U.S., ongoing air traffic controller shortages and aging technology have caused significant disruption. In May, equipment outages, runway construction and staffing shortages caused flight cancellations, diversions and delays at Newark Liberty, one of the main airports serving New York City.
On Friday, Israel attacked Iran, forcing carriers to cancel or divert thousands of flights to avoid conflict in the Middle East.
Even with insurance, many policies specify a multitude of exemptions in the fine print.
As a result, more travelers are taking out higher-end insurance policies, often at higher premiums, to better protect themselves, according to interviews with nine travel executives, insurance companies and analysts.
“We’re in times that are quite unstable so people are canceling more frequently than previously,” said Duncan Greenfield-Turk, CEO of Global Travel Moments, a luxury travel agency based in London.
European tourists have increased their purchases of travel insurance for this summer by 3% compared with last year, according to German insurer Allianz Partners.
Squaremouth, the largest travel insurance marketplace in the U.S., has seen a 34% year-over-year increase globally in purchases of “Cancel For Any Reason” protection.
British and U.S. holidaymakers in particular are more willing to pay a higher premium to protect their trip, said Anna Kofoed, the CEO of Travel for Allianz Partners.
About 32% more travelers globally requested an insurance quote from January to April compared to the same period in 2024, according to data from online travel insurance broker InsureMyTrip.
Businesses Seek Travel Advice
There has also been a rise in demand for bespoke travel advice as U.S. President Donald Trump has announced a number of immigration-related restrictions including tighter visa vetting procedures and travel bans.
World Travel Protection (WTP), a global firm that advises businesses on travel risk, said it has seen a rise in U.S. residents being detained at U.S. borders and told their documents were no longer valid as visa rules were changing.
WTP has worked with U.S. government representatives to help those individuals return home, according to Frank Harrison, the company’s regional security director for the Americas.
“We’re seeing a very strong uptick in organizations coming to us wanting to know how to navigate the landscape of the U.S. within the wider business,” Harrison said.
CIBT, which provides non-legal visa and immigration guidance, has seen a 50% rise in inquiries since November from companies seeking to better prepare their employees for travel to the U.S., according to CEO Steven Diehl.
High-End Insurance Products Emerge
One of the newest areas of business is in parametric insurance, which pays compensation automatically after a “trigger” event such as a flight delay without the need to file a claim.
Parametric insurance took off in some countries during the COVID-19 pandemic and in recent months more insurers around the world have begun to offer it.
When testing the market last year, Spanish insurer Mapfre’s Mawdy unit in Ireland said about 11% more customers opted for higher-tier travel insurance packages when instant compensation was included.
Travel destinations have also spotted an opportunity in this burgeoning market.
Marriott Bonvoy’s villa rentals and waterparks offer parametric weather insurance at the point of booking, automatically paying out on rainy days.
Sensible Weather, one of the providers of such coverage, reported its weather guarantees were added to 30% of theme park bookings and 10–15% of higher-value accommodation bookings when they were offered in 2024.
In March, Squaremouth launched a new insurance product with cruise-specific benefits such as coverage for being confined on a cruise ship or missing the port of call.
“Everyone is trying to make it easier for people to understand that each trip (…) is going to have a different set of concerns whether it’s hurricanes or blizzards or what’s going on with air traffic controllers,” Suzanne Morrow, CEO of online insurance broker InsureMyTrip told Reuters.
(Joanna Pluncinska and Henry Gale in London, Doyinsola Oladipo in New York; editing by Josephine Mason and Elaine Hardcastle)
