Asia Pacific travel insurance is projected to grow double digit for the next five to seven years, led by markets such as Malaysia, South Korea and Taiwan.
Quoting a research figure, Mark Kopec, the APAC head of travel under the general insurance division of Zurich Financial Services, said this strong growth momentum would likely to be sustained in a medium run.
"The (travel insurance) industry will grow at least 10 to 12 per cent in the next five to seven years. This would be led by markets such as Malaysia, South Korea and Taiwan, which has higher awareness of travel insurance importance.
"We will see significant growth, otherwise Zurich will not be investing heavily in this region," he said.
Ranging from Japan all the way to New Zealand, the APAC travel insurance market size reached US$2.8 billion, and continues to expand firmly. This constituted 28 per cent of a global US$10 billion industry.
For emerging economies such as Cambodia and Vietnam, their travel insurance market experienced tremendous growth over the last few years.
"They grow at a triple digit pace, with market size doubling each year," Kopec said.
Meanwhile, Zurich Insurance projected Malaysia travel insurance premium to grow at 15 per cent each year.
The robust economic growth, rising disposable income as well as enhanced standard of living are the key factors boosting the industry.
"This further enhanced with the emergence of low cost carriers, which offer opportunities to travel without spending much," he said.
The current penetration of travel insurance in APAC countries, excluding Japan, Singapore, Australia and New Zealand, are generally at a low degree.
These developed economies in APAC region have an average 80 per cent of penetration rate.
Currently, Malaysia’s travel insurance penetration rate is only 10 per cent (US$100 million), while where the actual market size, if fully tapped, could reach US$1 billion.
In 2011, the total number of outbound departures in Malaysia amounted to 46 million trips with an average growth of three per cent in the past three years. For inbound trips, there were about 24 million arrivals.
"APAC plays a very large part for Zurich and global travel insurance players. Given the amount of growth, we are investing heavily by putting a lot of resources to ensure we are there to support our clients," Kopec added.
While the growth of European and North America are stagnant, this global insurer already marked their footprint at South America and Middle East last year.