Agents should consider the new insolvency insurance policies that will soon become available in Australia as an additional source of revenue rather than a financial burden, according to insurance broker Gow Gates.

Speaking to Travel Today at the launch of the commercial safeguards yesterday, chief executive Chris Mackinnon stressed that, although the cost of the policies cannot be passed on, the higher cost of doing business as a result of their acquisition means that agents can pass on the outlay as an administration fee.

“This is a product that we’re selling through to the agents but the end game is for agents to be able to use it as a value add to their clients – consumer protection is the key to it but it’s a revenue stream potentially for the agents as well,” he said.

“It’s not something that’s a dead loss. To put money into the Travel Compensation Fund is mandatory, you have to do it, but that’s it – the money’s gone. But if they buy these insurance policies they can increase their administration fees and if they can sell it that way to their clients, then they can potentially earn revenue from this.”

Both Gow-Gates and UK-based International Passenger Protection (IPP) are joining the Australian Federation of Travel Agents on its latest round of transition workshops currently underway, to introduce the new policies and address any concerns.

“We know this works – it’s proven in other jurisdictions. It’s just a question of making sure we get that across,” Mackinnon said. “We will take as many phone calls and as many questions as needed to get people over the line with this.”

The company has already undertaken significant talks with many of the major players in the Australian travel landscape, and Mackinnon is confident that if they come on board, the flow on effect will trickle through the industry, encouraging others to get on board.

“But there are always going to be people that will not adhere to it, play around the edges a bit,” he admitted. “But a self-regulating industry will weed out people that don’t play by the rules.”

While he acknowledged that the voluntary nature of the new policies had caused some concern within the industry, Mackinnon stressed that those who chose to opt-in would be at an advantage.

“That becomes a unique selling points for the ones that do get it,” he said.

Furthermore, he was unfazed by the prospect of companies creating consumer protection plans of their own, insisting that he welcomed competition in the marketplace.

“But at end of the day they want proper protection and at the moment in Australia there’s only one place to go for that,” he said, adding white label versions of the scheme could be an option in order to suite the individual requirements of agency firms.

However, even if competitors were to emerge on the scene, they would not be able to offer the same pedigree of experience and success held by IPP, Mackinnon insisted.

“The product and underwriting the particular risks that we’re look at here is a piece of cake. What is extremely valuable to the market is the experience that IPP have got in the sector.”

He underlined its 24/7 airline alert service is a sign of how tuned in the company is with the industry, thanks to its 23 years of offering this product overseas and the previous 25 years’ experience of IPP managing director Brian McLean as a travel agent.

"These guys have knowledge and information that is second to none around what is going on in the industry," he said.