Reform becomes reality with commercial safeguard launch

Reform becomes reality with commercial safeguard launch
By admin


Australian travel agents will be able to sign up new insurance products providing a commercial safeguard from end supplier failure from December 1, with the launch marking a significant step in the implementation of the Travel Industry Transition Plan.

The Australian Federation of Travel Agents (AFTA) unveiled the solutions in Melbourne this morning with chief executive Jayson Westbury describing the launch as the “first real step in the rubber hitting the road.”

Both the Scheduled Airline Failure Insurance (SAFI) and End Supplier Insurance, to take effect on January 1, are the result of a collaboration between insurance broker Gow-Gates and UK company International Passenger Protection which has been providing insurance products to the travel industry for 23 years. They are underwritten by Liberty, a company in operation for more than 100 years.

“We are the oldest provider of products to the travel industry,” IPP director of international risks Paul McLean told industry representatives.

SAFI will cover refund and repatriation costs in the event of an airline collapse and credit card chargebacks in addition to a 24/7 airline alert service that monitors every airline.

“We will email or contact agents if there is a threat of insolvency,” McLean said. “We have the most up-to-date knowledge of any potential collapse.”

Meanwhile, the end supplier offering covers hotels, car hire, cruise and any others any agent might use.

“It works as a policy on its own with or without SAFI,” McLean explained.

He stressed the turnaround time for processing claims is generally within seven days although that might be extended in the event of a major collapse. The policies will also be available to agents that do not opt-in for the ATAS scheme.

The cost of each policy will be calculated on a case by case basis, dependent on the volumes of business done with each individual supplier which can be assessed through the provision of a BSP report, with the price calculated per ticket.

“There is no one set cost but it is an affordable price,” McLean reassured.

Westbury described this as the “most logical way” to charge for the scheme, by reducing it to the “lowest common denominator”.

While agents will be unable to pass the cost of the policy on to their clients, they can opt to apply an “administration fee” to recoup some of the outlay if they so wish.

Meanwhile, a third product targeted at consumers to be entitled the ATAS Participant Insolvency Insurance is currrently under development and will be ready for launch in April next year.

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