Travel insurance sales are projected to continue to increase in 2019 at a slightly faster clip than they did this year, according to Berkshire Hathaway Travel Protection's recent State of Travel Insurance report.
That projection is consistent with other insurers' expectations, barring any black-swan events in the coming year.
In the report, Berkshire Hathaway Travel Protection (BHTP) predicts that insurance sales to Americans traveling outside the country will increase nearly 4% in 2019, up from its 2018 projection, which called for a 2.9% increase in sales.
"While we don't have access to the overall industry sales, our research indicates that 2018 showed another healthy growth of travel insurance sales in line with our projections," BHTP president Dean Sivley said.
According to several travel insurance providers, 2018 did turn out to be a solid year.
Isaac Cymrot, vice president of industry relations at Travel Insured International, said, "We're continuing to see consistent growth from all channels, and we are not anticipating that that slows down in any form or fashion."
Allianz saw a sales increase of more than 20% year over year in 2018, according to external communications specialist Matt Popowski, and is expecting "very healthy double-digit growth" in 2019.
Travel insurance comparison site and marketplace Travelinsurance.com "saw significant growth in 2018 over the growth rates that we saw in 2017 across the board from basically all our providers," co-founder Stan Sandberg reported.
Sivley said there are several reasons the report is predicting growth next year.
"We believe the two most notable impacts are increased trip values and the continued increase of millennial travelers embracing travel insurance," he said.
BHTP used data from MMGY's 2018 Portrait of American Travelers, which found Americans plan to spend about 4% more per trip in 2019 than in previous years. Millennials in particular intend to spend more on travel.
"Since more expensive trips tend to be covered by travel insurance, we expect this overall increase in per-trip spending to persist in 2019 and directly translate into an increase in the number of trips covered by travel insurance," BHTP's report stated.
Research for BHTP's report also found that 24% of millennialssaid they plan to buy travel insurance more frequently in 2019, compared with 14% of all travelers. Millennials with children, Sivley said, are more likely than any group to buy more travel insurance in 2019, the survey found.
"Millennials are investing more in travel, they are traveling more frequently and they now understand travel insurance and its value," he said.
U.S. consumer awareness and understanding of travel insurance continues to be a growth driver for the industry.
Sandberg said Travelinsurance.com has a strong base of repeat customers but this year saw more first-time buyers, many of whom likely gained a greater understanding of travel insurance after a travel-disrupting event like a storm or natural disaster.
In the past few years, Allianz has focused on consumer-facing marketing to educate the public about the benefits of travel insurance, Popowski said. Those efforts include being active on social media, working with influencers to spread the message about travel insurance and using customer testimonials to highlight real-life examples where travel insurance has saved a consumer money or their health.
"I think the other insurance companies have had more visibility, as well," he said.
Increased demand from events has also helped highlight insurance as protection from unfortunate situations.
"I think all of that is pushing toward increased demand and visibility of the product category," Popowski said.
Travel advisers are also key to insurers' growth, Cymrot said.
"There are just as many competitors in our world as there are in any other segment of the industry," he said. "A consumer can go out and do a search for travel insurance and find 25 to 30 different options, and they need a travel professional to provide them with the right plan, just like they do a cruise or a tour. For us, it's critical."
The same factors are expected to boost sales in 2019, barring unforeseeable events such as a severe economic downturn, insurers said.
The new year could also bring innovation to the travel insurance industry. Sandberg said he expects to see new products and updates, "things that will make the industry look like it's a more future-looking, innovative kind of industry."
Sivley agreed and said BHTP will work to innovate products that appeal to the younger travelers it believes will be the force behind a bump in sales in 2019.
He said, "I believe travel insurance is prime for new product innovation in the very short term."