Insurance: Safety first is the best policy

Finding an agent who sells travel insurance could soon be like looking for the proverbial needle in a haystack if expert predictions for the coming year prove correct.

According to insurance professionals, the words ‘regulation’ and ‘Financial Services Authority’ (FSA) have struck terror into the hearts of agents, prompting many to stop selling travel insurance.

Many more are expected to give up if the FSA decides not to extend the travel trade’s exemption from registering with it into 2007.

For those who have stuck with insurance, price is a key issue. The days of 50% commission might be gone, but intermediaries say too many agents are pricing themselves out of a market now dominated by online sellers. They see this as another nail in the coffin for agency sales.

So who’s who in the world of insurance and what have they got to say?

Holiday Extras

Do I know you?The company was formed in 1983 and started selling travel insurance in 1986. The first product was a one-size-fits-all policy, but that has changed in line with travellers’ needs. The company now offers single-trip, European and worldwide annual multi-trip, short-break and backpackers’ insurance.
Key issues:“Keeping hold of their insurance business with so many other retailers jumping on the bandwagon is still the big challenge for agents. They can do this by using our recommended prices, which are competitively priced based on our research. They might earn less commission, but their volume of sales will rise.”
Shelley Roberts, UK head of sales
Get ready for:

– More agents taking up recommended selling prices.
– Agents selling more annual policies. They will earn more commission and correspond with client each year.

Sample premiums:Single trip – £21 (recommended price) for 17 days in Europe;  £24 premier cover.

Citybond Suretravel

Do I know you?The company was launched in 1981 by managing director Mansukh Ganatra, selling financial services to the trade. Travel insurance was added in the late 1980s. Originally called Citybond, the name was changed following the company’s acquisition of Suretravel in 2002. It offers single-trip, annual multi-trip, backpackers’ insurance for those aged 16 to 45, long-stay and corporate policies.
Key issues:“There is still a lack of enthusiasm among agents to sit the insurance exams. Some prefer to refer clients to us, which means having staff to handle the business. But we are also trying to direct business to the website. Older travellers are also an issue. We have to be sure competitors do not refer all their older-client business to us, because it would unbalance our book of business.”
Iain Chalmers, sales director
Get ready for:

– The FSA deciding not to renew its exemption for agents.
– More agents setting up links from their websites to Citybond’s so it can sell the policy on their behalf.

Sample premiums:Single trip in Europe – £12.30 for 17 days; annual multi-trip, Europe – £47.

Journeys Travel Insurance

Do I know you?The company was started in 1991 by managing director Patrick Chong, who claims it was the first to offer medical screening through agents and the first to offer a daily rate policy. Journeys Travel has just launched an online claims facility. Single and annual multi-trip are bundled in the Global Journeys policy.
Key issues:Key issues: “Our online facility allows agents to be appointed as representatives. They have to sell over our extranet, which takes them through the correct procedures. We hope it will help us pick up new business, but it is a high-risk strategy for us. One agent making a mistake could shut down the whole operation.”
Patrick Chong, MD
Get ready for:

– The FSA deciding not to renew the exemption for travel agents in 2007. It has to decide this year and Chong can’t see how the FSA can justify it when the objective is to protect the consumer.
– Insurers seriously addressing the issue of older travellers, making it tough for the over-80s to get insurance.

Sample premiums:Single trip – from £10.50 for 15 days in Europe; from £24.62 worldwide, including the US and Canada.


Do I know you?The company was set up in 1996 by Jonathan Buttery, who was joined by former Hamilton Barr colleague John Peters. The company has one retail scheme sold through selected miniples and also works with tour operators.
Key issues:“Agents’ diminishing share of the travel insurance market and FSA regulation is increasingly a problem and changing the way agents do business. Many have lost so much business they are questioning whether they want to sell travel insurance at all and are looking for an arrangement where they direct clients to us. Older travellers will find it increasingly difficult to get cover as age restrictions are tightened to make policies more competitively priced.”
Jonathan Buttery, director
Get ready for:

– The continuation of consolidation among travel insurance providers, which is bad news as it restricts customer choice.
– The FIFA World Cup in Germany this summer, which is likely to add to the tough holiday-market conditions because people will stay at home to watch the games. This will hit travel insurance sales..

Sample premiums:Single trip – £12.65 for 17 days in Europe; £28.80 worldwide, including the US and Canada.


Do I know you?The company was started in December 1996 by Steve Nickerson, formerly of Accident and General. He was joined by former colleagues John Buckingham and David Marshall. The company offers single, annual multi-trip, long-stay and winter-sports policies, as well as cover for weddings, golf and business.
Key issues:“Agents have to tackle the issue of price. Because we are competing against the likes of Tesco and the online sellers, we offer agents very competitive prices, but they put on too much of a mark-up. They make themselves uncompetitive. Age loadings will become more of an issue this year.”
Max Hensser, national sales manager
Get ready for:

– The end of free travel insurance.
– Increased focus on the elderly as agents become more aware of how to protect their insurance accounts.

Sample premiums:Single trip – £7.72 for 17 days in Europe (booked within one month of travel); annual multi-trip –
£41 worldwide.

Rock Insurance

Do I know you?The company was started in August 2001 by managing director Antony Martin, formerly of Primary, who was joined three months later by Jeff Rush, who was at the Travel Protection Group. The company sells single, annual multi-trip, long-stay and winter-sports cover through agents, including Travel Counsellors.
Key issues:“Too many agents are still charging too much for insurance – £35 for a policy that should cost £15-£20. We find lots of agents are fearful of FSA regulations because they don’t understand them and simply don’t want to sell travel insurance. They are not interested in referral schemes.”
Antony Martin, MD
Get ready for:

– More of a swing to direct sales, unless agents look at price and use technology to make the insurance part of the holiday transaction.
– Fewer agents selling travel insurance by the end of the year.

Sample premiums:Single trip – £17.81 for 17 days, worldwide; winter sports – £19.41 for 17 days in Europe.

PJ Hayman

Do I know you?PJ Hayman was started by Peter Hayman in 1990 and became part of the Travel Protection Group in 2001 before being acquired by Crispin Speers and Partners (CSP) in 2003. It is the retail arm of CSP, with a portfolio that includes single, annual multi-trip, long-stay, activity and UK policies. It also offers Freespirit insurance, for people with medical conditions, including the terminally ill, with premiums quoted individually depending on the condition.
Key issues:“The retail market will continue to shrink because agents can’t compete with the high street and the Internet on price or product. About 50% of policies bought elsewhere are annual multi-trip and FSA regulations stop agents doing renewals unless the policy is bought with a holiday.”
Peter Hayman, chairman
Get ready for:

– The FSA deciding travel agents have to be registered. It’s not a good thing because there is a large sector of the population that buys its travel insurance from agents. They will no longer buy cover.
– Agents losing sales as more people buy their insurance as part of a dynamic package.

Sample premiums:Adventure holiday insurance – £52 gross for nine days, including the Cresta Run; long-stay backpackers – £153 gross for six months worldwide.


Do I know you?The retail brand was set up in 1996 as part of the Inter-Group launched in 1993 by Andrew Blowers. Inter-Group was bought by Churchill, but is now part of the Royal Bank of Scotland. It offers single and annual multi-trip policies, the latter relaunched to cover customers aged up to 74 (travelling in Europe) or 69 (worldwide).
Key issues:“Not all agents understand the FSA regulations, or the fact that it will jeopardise their business if they sell a policy by mistake. We have set up a website with competitive prices to which agents can direct business and still earn commission.”
Sergio Pia, sales director
Get ready for:

– More consumers demanding annual multi-trip policies – agents will have to respond.
– Sales of travel insurance to become more dynamic.

Sample premiums:Annual multi-trip – £38.77 for under 55s in Europe; £54.26 for under 74s in Europe or £81.38  worldwide. These premiums apply to branded website only.

Do I know you?GoSure is an Internet-based travel insurance provider. It was started five years ago and acquired 18 months ago by Lloyds broker John Holman and Sons. It offers single and annual multi-trip, winter-sports, long-stay and backpackers’ policies.
Key issues:“By marking premiums up too high, agents have lost the trust of consumers, who are now more aware of the competition and of the fact that agents are not regulated. Agents naively thought travel insurance would always be theirs to sell and so they have not jumped on the Internet bandwagon. They could join affiliate schemes like ours, but very few have. Their share of the market will continue to shrink.”
Mark Copsey, account manager
Get ready for:

– An FSA decision to regulate travel industry sales of insurance. This is likely to end agency sales as few retailers will think it worth the cost of registering with the FSA.
– A period of premium stability, but rates will then start to creep up.

Sample premiums:Single trip – £14.30 gross for 17 days in Europe; annual multi-trip – £72.41 gross worldwide.

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