Supplier Insolvency Insurance products:

Size: px

Start display at page:

Download "Supplier Insolvency Insurance products:"

Arleen Walters
6 years ago
Views:

(SAFI) End Supplier Failure Insurance (ESFI) Travel

1 In association with Supplier Insolvency Insurance products: Scheduled Airline Failure Insurance (SAFI) End Supplier Failure Insurance (ESFI) Travel Agent & Intermediary Failure Insurance (TAIFI) For July 2014

2 About International Passenger Protection Ltd (IPP) Formed in 1990, some 23 years ago after identifying a lack of consumer protection IPP are the oldest and Worldwide leader in providing financial failure insurances to the travel industry IPP have Pioneered all their products including IPP operate in over 30 countries around the world IPP cover more passengers in the UK than the CAA or ABTA IPP cover thousands of Travel Agents around the world For example 80% of Travel Agents in India, Czech Republic, Slovak Republic 90% of Travel Agents in Kenya, Uganda & Tanzania

3 Insured through International Passenger Protection

4 Security IPP is an Underwriting Agency, Lloyd s Cover holder and regulated in the UK by the FCA A rated security Insurers and Reinsurers with combined net assets in excess 100 Billion IPP are a cover holder for Liberty International Underwriters (AM Best A rated). Liberty International Underwriters is part of Liberty Mutual Insurance a Fortune 100 company that's more than 100 years old.

5 Appointed by AFTA to bring solutions together for their members Agents for IPP in processing applications for IPP s various products Applications, premiums and enquiries to go through Gow Gates Gow Gates is regulated by Australian Securities and Investments Commission (ASIC) Specialists in Travel Agent & Tour Operator products

6 Protect or NOT, you have a choice! ATAS provides a strong platform for consumer recognition of professional conduct and business ethics, and can strengthen a business reputation and value proposition to the customer. Benefit of being an ATAS participant means you have a choice to protect your monies and that of your customers in the event of insolvency. Thus an ATAS participant has the choice to sell a financially protected or unprotected holiday You control the way you wish to sell your service. IPP at the request of AFTA through Gow Gates have brought to the market three key products for ATAS participants.

7 Optional ATAS participant products

business is not the same as the next agent Your risk requirements will be different We need to know your risk requirements in

8 What do these products cost? IPP is not replacing the TCF but providing a range of insurance backed commercial solutions to support the industry Your business is not the same as the next agent Your risk requirements will be different We need to know your risk requirements in order to give a quotation Premiums are not the same for all, few people drive a Ferrari and many drive a Toyota, why should a Ferrari driver pay Toyota prices! Thus ensuring a fair premium for a fair risk for all next collapse?

10 Travel Agent concerns Customers stranded abroad Customers contacting agents to bring them home or refund tickets whether the agent is liable or not Repatriation can cost up to 3 times original ticket cost Credit card charge backs to travel agent where customers go back to their bank Current and past oil prices and global economic climates continue to put strain on airlines Which airline will collapse next who is safe? Can Agents afford to pay out for their customers losing their money, especially from a large collapse?the next collapse?

11 Some past and recent Airline Collapses

12 Scheduled Airline Failure Insurance (SAFI) One policy to an ATAS participant covering them for losses arising from the insolvency of an airline If insolvency occurs prior to travel then cover is for the cost of the original pre booked flight If insolvency occurs during the trip then cover is for the cost of the return flight (equivalent class cost) up to the per ticket policy limit The ATAS member is the Insured, Policyholder and beneficiary The risk is the declared and agreed Scheduled Airlines Premium to be charged on all tickets to ensure lowest cost

13 24/7 Airline Alert Service ATAS policyholders benefit from IPP s 24/7 Airline Monitoring System which will alert the ATAS Policy Holder of potential threats of and actual Airline Insolvencies. Alerts will confirm necessary procedures required by the ATAS Policy Holder in handling claims Alerts will confirm if an Airline is defined as not covered for tickets being issued going forward The ATAS Policy Holder makes their own commercial decision to continue selling that airline or not without cover. Agents rely on this service so they can take appropriate steps to avoid their customers being inconvenienced and unnecessarily panicked before they travel or are stranded abroad.

14 What Does SAFI Cost? Your business is not the same as the next agent Your risk requirements will be different You will sell a different pattern of airlines compared to another agent therefore your risk will be different. We need to know your risk in order to give a quotation Premiums are not the same for all, some agents sell a lot of Emirates and others may just sell Dog Airlines as an example Thus ensuring a fair premium for a fair risk for all agents.

15 Can I pass the cost on to customers? You cannot pass the cost on as an insurance policy as this is a regulated activity but you will be taking on the policy for your own benefit in order to be in a position to refund or cover costs for repatriation. Therefore you have two options: 1. Pass the cost on to ALL passengers as a Airline Failure Administration Fee, Airline Failure Fee or Repatriation Administration Fee 2. Do not pass the cost on and absorb within your business running costs AFTA is developing policy for consideration by government to allow SAFI and ESFI to be passed onto customers on an optional basis.

16 Jo Blogg s Travel INVOICE Ticket Sydney Singapore London return Business Class Qantas AUD $4,000 Taxes AUD $ 600 Service Fee AUD $ 200 Travel Insurance AUD $ 30 * Total AUD $4,835 * Airline Failure Administration Fee Jo Blogg s Travel have taken out an insurance policy with Liberty International Underwriters through International Passenger Protection Limited to cover the insolvency of your Airline. (full marketing wording)

17 Does SAFI cover me against charge backs? Yes! if you have a SAFI policy you can immediately contact your clients to refund or repatriate your customers which will be perceived as a great customer service and prevent customers from having to go back to their banks and invoking a charge back to your agency. Will all airlines be covered? Generally we cover the majority of airlines, there are sometimes a few airlines we have to exclude because either there is a threat of insolvency in our opinion or an airline has filed for insolvency i.e. Chapter 11.

18 Is there an excluded airlines list? ATAS policyholders will have access to a secure webpage confirming Airlines which are defined as covered Schedule Airlines, also they will benefit from IPP s 24/7 alert system. How do I make a claim? Simple! one short claim form to IPP covering all your refunds and repatriations or charge backs should a customer have automatically gone back to their bank. IPP will remit funds by return direct to your account usually within 7 working days of receiving full claim documents

19 Application process through Gow Gates One page simple application form to be completed and returned to Gow Gates along with agents last 12 months BSP and NON BSP Airline Sales Quotation given to agent with list of agreed airlines and limits of cover which are usually based on 30 day sales exposure Agents can decide to increase airline limits if required at the quotation stage or anytime during the policy by notifying IPP through Gow Gates to get agreement Agent signs quotation and pays premium to Gow Gates, large premiums can be paid on a monthly declaration basis. Agent receives policy from IPP through Gow Gates with a schedule of Airlines and limits

20 Agent passing on an Airline Failure Administration Fee To cover the cost of administrating such an insurance policy agents may wish to charge an administration fee to cover their costs Agency A Total number of air tickets per annum 24,000 SAFI Premium charge per passenger/ticket (* Price for demonstration only) AUD 2.50 Total Insurance Premium due AUD 60,000 Agency A passes on an Airline Failure Administration Fee per customer AUD 5.00 Income from Airline Failure Administration Fee AUD 120,000 PROFIT TO AGENT LESS COST FOR INSURANCE AUD 60,000 Insurance cost = ZERO, profit = AUD 60,000

21 Scheduled Airline Failure Insurance (SAFI) Cover Airline insolvency exposures Protect against charge backs Protect your profits Protect your customers Give a peace of mind promise to keep and generate new customers Create a new revenue stream

23 End Supplier Failure Insurance (ESFI) Extends SAFI cover to include not only airline insolvency but other End Suppliers of the holiday booking such as: Hotel Car hire company Excursion provider Train Operator Coach Operator Ferry operator Theme Park One simple application form through Gow Gates supplying on a spread sheet all your end suppliers with annual turnovers.

25 Consumer Protection Insurance IPP have been providing consumer protection insurance for over 24 years IPP cover more passengers than the CAA and ABTA in the UK IPP believe in a fair premium on a per agency basis, not one rate for all IPP protect major customers of major travel brands globally.

28 Travel Agent & Intermediary Failure Insurance (TAIFI) Covering the Insolvency of the ATAS participant for the benefit of their customers Must be ATAS accredited to apply Must prove solvency of the business Simple application through Gow Gates Financial assessment carried out by IPP Premium on a percentage of turnover basis Policy will cover all customers bookings while money is with the ATAS participant

29 Travel Agent & Intermediary Failure Insurance (TAIFI) Online sales reporting and premium payments Customers will receive a certificate confirming the policy taken out by the ATAS participant Policyholder is the ATAS participant whom pays the premium Insurance allows ATAS participant to give a peace of mind promise to its customers that their money is protected In the event of an insolvency of the ATAS participant customers contact the Insurer to make a claim for loss of monies which were still being held by the ATAS participant

30 What Does TAIFI Cost? Your business is not the same as the next agent Your risk will be different You will run a business more or less profitable than another agency You will have more or less cash in the bank than another agency You will have more or less debt than another agency We need to know your risk in order to give a quotation Why should you pay the same premium as a business that is not making profits, losing money with low cash flow and bad debts Thus ensuring a fair premium for a fair risk for all agents. AUD 100 application fee which is refundable on acceptance of agreed cover

Thank you for your time For further information and application forms please contact:- Rebecca Fleming(rfleming@gowgates.com.au), Gow-Gates Insurance Brokers Level 8, 491 Kent Street, Sydney NSW 2000.

31 Thank you for your time For further information and application forms please contact:- Rebecca Gow-Gates Insurance Brokers Level 8, 491 Kent Street, Sydney NSW POSTAL : GPO Box 4731 Sydney NSW TELEPHONE: / FAX: IMPORTANT Dog Airlines is a fictional name and does not represent any particular airline but merely to demonstrate an agents diversity of airline sales. NO DOGS WERE HARMED IN THE MAKING OF THIS POWERPOINT PRESENTATION

Guidance on Completing the Application Form for a New Small Business ATOL

Consumer Protection Group Air Travel Organisers Licensing Guidance on Completing the Application Form for a New Small Business ATOL Please ensure the correct payment 1 is made when submitting the completed