The Association of British Insurers (ABI) has rebutted suggestions that cover against airline insolvency should be made a compulsory element of standard travel insurance policies in its response to the Department for Transport’s Airline Insolvency Review.
The ABI believes that travel insurance is already a very competitive market and introducing an additional level of mandated cover would be an unwelcome disruption. It would limit customer choice and potentially act as a barrier to the take up of cover by adding additional expense.
The industry feels that the issue is not the provision of cover, rather, it is the apparent lack of awareness amongst travellers of the range of consumer protections that already in place through travel packages, credit cards, ATOL and so on.
“Whilst we are fully supportive of measures that improve the level of protection consumers have whilst travelling abroad, the primary design of travel insurance is to cover the cost of expensive medical treatment,” says Charlie Campbell, Senior Travel Policy Adviser at the ABI. “Introducing mandatory airline insolvency cover ignores the real issue of lack of awareness of cover already in place, whilst increasing costs and confusion.”
The ABI has instead backed the Review’s consideration of a model that either extends or replicates the ATOL protections across all airlines, not just those which are part of package holidays, and supports a gap analysis of current consumer protections to identity the gaps and the overlaps.