CFAR travel insurance market forecast to reach $4.58 billion by 2030

The global market for cancel for any reason (CFAR) travel insurance is forecast to grow to US$4.58 billion by 2030 as travellers seek greater flexibility amid increasingly unpredictable disruption.

The Business Research Company (TBRC) estimates that the market will increase from $2.67 billion in 2025 to $2.98 billion this year, representing growth of 11.7%.

It forecasts further expansion at a compound annual growth rate of 11.3% through 2030, taking the market to $4.58 billion.

TBRC attributed recent growth to a combination of increasing international travel, greater awareness of travel insurance, more frequent flight cancellations and delays, growth in online travel booking, and higher leisure travel spending.

Looking ahead, the research company identified geopolitical tensions and climate-related travel disruption among the factors expected to increase demand for greater cancellation flexibility.

The expansion of digital distribution, demand for more customisable insurance products, and increasing uptake among millennial and Gen Z travellers are also expected to support growth.

TBRC identified personalised insurance add-ons and digital-first purchasing as emerging trends within the sector.

Changing expectations around cancellation

CFAR is typically offered as an optional enhancement to standard travel insurance.

While conventional trip cancellation cover generally responds only when cancellation results from circumstances specified by the policy, CFAR can provide partial reimbursement when a policyholder cancels for a reason outside those conventional insured events, subject to the terms and conditions of the product.

The distinction is particularly relevant where travellers decide not to proceed with a trip because of circumstances that have not resulted in a formal cancellation or another insured event under their standard policy.

For insurers, greater demand for CFAR also raises questions around product design and pricing. Providing policyholders with greater discretion over cancellation broadens the circumstances in which reimbursement may be available compared with traditional named-peril cancellation cover, making eligibility requirements, reimbursement levels, and pricing central to the product proposition.

TBRC said increasing international travel was another factor supporting the market. It cited UN Tourism figures showing around 300 million international travellers during the first quarter of 2025, 5% more than during the same period a year earlier.

The combination of rising trip volumes and greater uncertainty around travel could increase the value travellers place on cancellation flexibility, particularly for higher-cost trips where a decision not to travel can leave substantial prepaid expenditure at risk.

Asia Pacific tipped for fastest growth

North America accounted for the largest share of the CFAR market in 2025, according to the research, while Asia Pacific is forecast to record the fastest growth over the coming years.

TBRC attributed the projected expansion in Asia Pacific to factors including increasing outbound tourism, digital adoption, and growth in the region’s middle-class population.

The findings point to a wider challenge for travel insurers as consumer expectations move beyond protection against defined disruption towards greater flexibility over whether to travel at all.

For providers, the opportunity will be balancing that flexibility against the additional exposure it creates while ensuring customers understand how CFAR differs from conventional cancellation protection.