ITG wants AFTA to negotiate insurance on behalf of members

Issues & Trends – August 2013

ITG wants AFTA to negotiate insurance on behalf of members

AFTA chief executive Jayson Westbury was upbeat following talks with Paul McLean, director international of London-based insurance provider International Passenger Protection (IPP) earlier this month.

McLean flew to Sydney to be briefed by Westbury on the scope for insurance policies to provide Australian agents with protection against supplier collapse and consumers with protection against agency collapse.

As McLean flew back to London, Westbury told travelBulletin he was optimistic that IPP will soon be able to provide Australian agents with details of insurance options “that will provide the commercial solutions that form an important part of the new arrangements being developed under the travel industry transition plan (TITP) with AFTA”.

But Independent Travel Group managing director Tom Manwaring expressed disappointment that
AFTA is not planning to negotiate for an industry policy rate to be made available to agents on an optional basis as one of the benefits of AFTA membership.

Manwaring hit the headlines last month with outspoken criticism of JTG’s plans for its own customer charter and customer protection policy which he depicted as undermining the credibility of the whole-of-industry accreditation scheme (ATAS) being developed by the TITP process.

Both Westbury and JTG managing director Rob Gurney rejected this criticism with Gurney asserting that his company fully supported ATAS.

Manwaring and Westbury have subsequently met and both describe the talks as cordial. Manwaring went out of his way to praise the work that Westbury has done on setting up ATAS as a voluntary replacement for the licensing/TCF arrangements now being phased out.

However the two disagree about the need for AFTA to negotiate an insurance deal on behalf of all its members.

“Otherwise there will be divergent policies across the groups and it will become a competitive issue not an industry issue,” said Manwaring.

Heading a group of 500 agents with a total transaction value around $1 billion, Manwaring is confident that ITG can provide its members with a competitive insurance deal.

But his preference is for “a structured industry approach that gives a level playing field and provides a benefit to AFTA members”. He says a range of competing propositions would be “detrimental to the industry”.

Westbury told travelBulletin that he has discussed two aspects of insurance with IPP.
One is cover for agents against the collapse of suppliers, providing protection for client payments and, importantly, ensuring that agents don’t face credit card charge backs.

“It would cover the black hole that has existed up until now (under the TCF),” said Westbury.
The second is protection for clients against the collapse of the agents they deal with. Westbury acknowledges that this is a more complex issue with the need for a third party co-ordinator or “wrangler” to handle claims from consumers.

He sees this as a role for groups of agents, acknowledging the JTG proposal (which could be underwritten by IPP or the company’s balance sheet) as one example of this.

A major advantage of this approach, he says, is that other travel agents, rather than a faceless bureaucracy, become the “consumer champions” when there is a collapse. However he ruled out AFTA taking on a “wrangler” role.




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