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Lack of failure cover is ‘big problem’ Juliet Dennis


The trade is facing a “huge problem” as insurers pull out of the sector or make it harder for agents to secure financial protection against business failure. Agents are being warned to


prepare for potential issues ahead of annual policy renewal dates. To adhere to the 2018 Package


Travel Regulations, agents can protect consumers’ money against the failure of their businesses by either taking out financial failure insurance, buying a bond (often backed by insurance) or opening a trust account. Matt Purser, director at insurance


broker Travel Vault, said renewing failure insurance and insurance-backed bonding in the current market was


proving “challenging” for agents. He said: “It is a huge problem.


Financial failure insurance is still available but with all these routes [of financial protection], the appetite of insurers has shrunk. Even with the light at the end of the tunnel, and news of vaccines, for new policies to be underwritten there needs to be a cast-iron agreement.” Purser said some agents Travel


Vault works with had been unable to get insurance renewed or faced higher premiums and less favourable terms. “We are helping businesses find alternative ways to comply,” he added. “But, for some, the only way to legally operate is to have a trust where customers’ money is left until the customer returns.” Antony Martin, managing


Trade optimistic for January but expert tips ‘ultra-lates’


Juliet Dennis


The trade is optimistic about January sales despite predictions business could be less than half the usual levels and that summer could be an “ultra-late” market. Industry veteran Steve Endacott


said he anticipates peaks will be 30% to 40% of traditional levels because of uncertainty over the speed and rollout of low-cost Covid testing. But agents and operators


said a recent pick-up in demand had given them strong grounds for hope that a greater number of


6 3 DECEMBER 2020


people would book in January. Designer Travel managing


director Amanda Matthews said: “Even if it’s not level with the previous year, I feel it will be better than [Endacott’s prediction].” She said a shorter quarantine period and faster testing could see demand “ramp up sooner than many think”. The Travel Network Group said


members’ clients were in the “fact- finding stage” and planned to book “soon”. A spokeswoman said: “We are hopeful this will be in January.” But domestic operator Great


Little Breaks forecast a “slow start”


to January. Director of trade relations Chris Cundall said the “bounce” would come with more insight of “when things may be back to normal.” Endacott warned firms to adapt


January campaigns with “measure and react fast” policies based on demand. He suggested the older market


could be the fastest to return after receiving the vaccine first, while the family sector, which normally accounts for 60% of peaks sales, may be reluctant because of testing costs. Matthews agreed firms needed to


be “nimble, flexible and prepared to go with whatever sector of the market


Financial failure


insurance is still available but the appetite of insurers has shrunk


director of broker Rock Insurance Group, agreed Covid-19 had created “significant issues” in a sector hit by high-profile collapses such as Thomas Cook. He said this had seen the insurance market that supports financial and supplier failure “almost disappear”. Martin said Rock Insurance


was working on products “to plug gaps” for 2021, adding: “The industry will bounce back and along


with that will come more insurance products, but I suspect for many this will be too late.” Zurich Insurance Group would


not comment on reports it is withdrawing financial failure cover on new policies from January. Companies offering trust


solutions have already reported increased enquiries. Jacqui Cleaver, head of marketing


communications at Protected Trust Services, said: “We’re getting an unprecedented amount of agents calling us who are highly concerned as they cannot renew their insurance. If they don’t renew, they can’t trade.” In the past two months, Cleaver


said PTS had received applications from 42 firms wanting to trade with financial protection.


Agents are divided on how quickly bookings will bounce back


is booking” but said Designer Travel was already seeing a “good mix of adults and families” booking and a rise in long-haul sales. Debbie Goffin, sales and marketing


director at Premier Holidays, said its peaks plan was flexible based on agents’ needs, with demand polarised between late bookers and those booking a long way out. Endacott predicted flight capacity


would “return rapidly for summer 2021” as demand increases, creating an “ultra-late” market, but he believes it will only return to around 70% of 2019 levels.


travelweekly.co.uk


PICTURE: Shutterstock


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