Sizing the Digital Flight Insurance Opportunity in the United States

Estimate the size of the market in the United States for a business that sells flight insurance online. Lay out how you structure the estimate, label each assumption, and end with a figure and a sense of how confident you are in it. ```hint Pick the unit of sale Decide whether to build up from travelers and their trips or from the bookings that airlines and travel sites process, and be explicit about the unit a policy is sold per. ``` ### Clarifying Questions - What does flight insurance cover here: trip cancellation and delays, lost baggage, medical care abroad, or all of these? - Does the US market mean policies bought by US residents for any flight, including international trips, or only coverage for flights within the US? - Should the size be measured as the premiums travelers pay, or as the revenue an online seller keeps after the insurer's share? - Do policies offered at an airline's or travel site's checkout count as online sales, alongside insurer and comparison websites? ### What a Strong Answer Covers - A clear definition of what is sold, to whom and through which channels, settled before any arithmetic - A top-line equation that links air travel volume to insurance spending - Labeled, round assumptions that recognize that travelers differ in how often they fly and how likely they are to insure - Correct arithmetic with consistent units, keeping trips, boardings and one-way legs distinct - A sanity check from a second angle, a final range, and how the answer shifts under the other definition of market size ### Follow-up Questions - Which assumption moves your answer the most, and what data would you use to pin it down? - How much of this market could a new online seller realistically capture in its first few years, and why? - How would the market change if airlines made more of their fares fully refundable?