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Published on : Tuesday, May 17, 2022
Demand for outbound holidays risks outstripping the insurance and bonding available to financially protect customer money despite signs of insurers returning to the sector.
Leading industry accountant Chris Photi, Head of Travel and Leisure at White Hart Associates, noted the bond insurance market had “drastically reduced” during the pandemic with two of the five major players exiting the sector, forcing some travel firms to scale back their non-mandatory bonding.
Photi told a travel forum in London last week that some had to set aside bonding single components such as accommodation- only and change their terms and conditions.
Yet speaking at an ABTA Travel Law conference in London the same day, ABTA Director of Membership and Financial Protection Rachel Jordan reported the most recent renewal was 100% the best she has experienced and said that there is a willingness among bond obligors [issuers] to help members.
Travel Trade Consultancy Director Martin Alcock that there are early signs of insurers coming back into the market. For the last two years, they’ve not been willing to write new bonds, [but] we’ll see a new insurer this summer.
He suggested there is a “cohort” of new entrants among merchant acquirers “willing to take on new business” and invest in the sector.
Insurance specialist Iain Bird, head of bonds and credit at Great American International Insurance, told that they continue to support the market.
But asked if the sector would see more insurers return, he said that some companies will come in but there have been large losses in travel and that will put some people off.