Vacations and sporting trips are meant to be fun, relaxing, adventurous, provide a sense of wellbeing or significant achievement – or a combination of the above. Many people budget and save so they can do them well. However, when plans change and a trip must be cancelled, or things go wrong while far from home, people risk losing substantial amounts of money. They may also face further costs to resolve a difficult situation, especially if the solution involves medical treatment abroad or new airline tickets.

Forms of leisure travel and the associated risks are variable and evolving. The need for innovative, flexible and customized specialty travel insurance plans that consider any eventuality are therefore more essential than ever, especially against a background of medical inflation, natural disasters, global health risks, and geopolitical events.

Such coverage plans also need to be truly global in scope. A New Yorker taking a kayaking trip to Montana faces very different risks to an Australian planning a skiing holiday to Japan, or a family from the UK enjoying a summer vacation on the Turkish Riviera. They all, however, face unique risks that need expert coverage.

International Travel

Inevitably, international leisure travel tends to require more complex coverage than domestic, the most important of which are medical evacuation and repatriation. Unfortunately, these are often the most overlooked since many individuals do not understand the high stakes involved: an individual who suffers a medical emergency abroad when they are uninsured or underinsured could incur life-changing financial burdens.

In 2023, a member of the Association of British Insurers (ABI) in the UK covered $33,000 in repatriation and medical expenses for a customer who sustained injuries in a forest fire¹.

In 2022, a British traveler visiting Thailand contracted a severe blood infection, requiring intensive medical treatment and an air ambulance back to the UK. The travel insurer paid a total of $327,000 for these services, according to the ABI².

In the US, in 2022, medical evacuation pay outs averaged nearly $83,000 and the highest claim was $223,100, according to travel insurance marketplace SquareMouth³.

Exacerbating these costs is global medical inflation, which reached a record 10.7% in 2023 – the first time the medical trend rate climbed into double digits. While market expectations are for this to decrease slightly to an average of 10.4% in 2024,⁴ the costs are projected to remain high at 10.4% in 2025.

While it is the norm for medical inflation trends to be measured on a global basis, its effects vary from country to country. In the case of single trip cover, as opposed to annual worldwide travel, pricing needs to be reflected accordingly based on a particular travel destination.

Because insurers understand the high costs involved, travel insurance policies offer a multitude of limits for medical emergency expenses, which should provide some comfort for travelers.

Complications and Cancellations

While medical evacuation and repatriation are among the highest claims in terms of cost, cancellation coverage is the highest in terms of quantity. In the US alone, delays and cancellations accounted for nearly two thirds of paid claims in 2022⁵.

This is therefore an essential coverage whether you are traveling internationally or domestically, and travel coverage can account for unforeseen circumstances and knock-on effects including missed connections, medical emergencies, strikes and natural disasters.

Parametric coverages, where claims payments are automatically triggered if, for example, your flight is delayed or baggage is lost, are also becoming increasingly popular, as are tailored insurance products that can include, for example, pets or sporting equipment. This is particularly important when an individual requires a therapy pet, or for holidays that require specialized and valuable equipment for activities such as cycling, mountaineering, or rock-climbing.

Adventure Travel

When sports, adventure or adrenaline are priorities for leisure travelers, this makes them vulnerable not just to standard risks such as equipment theft or loss, and injury, but also to unique risks that may not be included in standard insurance policies.

In a survey published in August 2024, UK-based website GoCompare found that only 3% of single-trip policies included quad biking, and only 21% covered white-water rafting as standard. The same survey also found many insurers are excluding sports and activities that they previously covered, such as bungee jumping and horseback riding⁶.

Adventure travel trends are, however, changing and the demand for adventure tourism is growing. In 2024, the global adventure tourism market was estimated at $406.12 billion and is projected to grow at a compound annual growth rate (CAGR) of 16.8% from 2025 to 2030.⁷

Demand for different activities also fluctuates. In the US, in 2024, for example, interest in safaris and horseback riding excursions was up significantly, at over 30% and 21%, respectively. Water activities, however, saw a decrease in interest, with snorkeling, scuba diving and surfing down an average of 15% overall⁸. Insurers therefore need to accommodate this changing demand with flexible policies and robust claims procedures.

Whether individuals are on safari in Kenya, abseiling in France, cycling in New Zealand, horseback riding in Argentina, or hiking in their home country, they need to be able to access a customizable, comprehensive, affordable and flexible travel insurance plan, that covers all their needs, and possible risks, easily.

Evolving Travel

As our climate changes in the years to come, so will the leisure travel market, and we, as insurers, need to adapt to the impact this will have. Destinations and how individuals choose to get to them is likely to change. Cooler weather destinations such as Canada and Norway, for example, are already becoming more popular, due to the increase in global temperatures⁹.

We also expect to see a growth in demand for more sustainable travel and in turn, individuals may look for insurers that support sustainability measures. In the coming years, this could lead to more conscious decisions to travel domestically rather than internationally. People might choose to fly less, or avoid trips with a high carbon footprint such as cruises.

Now, more than ever, leisure travel insurance providers need to be nimble, entrepreneurial, pioneering, and tech driven. This allows for quick and on-demand adaption of pricing and coverage, tailored to the wide variety of risks associated with leisure travel, whatever that may involve.

• ¹ https://www.abi.org.uk/news/news-articles/2024/8/safe-travels-remember-the-travellers-ten-when-taking-out-insurance/
• ² https://www.abi.org.uk/news/news-articles/2023/7/pack-your-travel-insurance-this-summer-and-remember-your-trip-for-the-right-reasons/
• ³ https://www.squaremouth.com/press-room/travel-insurance-claims-paid-out-8x-policy-premium-in-2022
• ⁴ https://www.wtwco.com/en-us/insights/2024/10/2025-global-medical-trends-surveyfinds#:~:text=The%20WTW%20Global%20Medical%20Trends,be%20an%20average%20of%209.9%25.
• ⁵ https://www.squaremouth.com/press-room/travel-insurance-claims-paid-out-8x-policy-premium-in-2022
• ⁶ https://moneyweek.com/personal-finance/insurance/activities-your-travel-insurance-might-not-cover
• ⁷ https://www.grandviewresearch.com/industry-analysis/adventure-tourism-market-report
• ⁸ https://www.squaremouth.com/press-room/summer-travel-recap-the-4-most-surprising-seasonal-travel-trends
• ⁹ https://travelweekly.com.au/article/atta-sheds-light-on-the-top-trends-shaping-adventure-travel/

This material is for general information, education, and discussion purposes only. Statements contained herein are not professional or legal advice of AXIS or its affiliates. AXIS makes no representations as to the accuracy or completeness of the information contained herein and is under no obligation to update or revise the information as a result of new information, research or future events. AXIS assumes no liability by reason of the information within this material.