Advantage and Worldchoice members could become Financial Services Authority-appointed representives in a move which threatens to put more than 1,000 agents outside ABTA’s travel insurance scheme.
The move follows Thomas Cook’s decision to switch to FSA regulation . Now Advantage is offering its 730 shops and Worldchoice agents, the opportunity to become FSA representatives through its joint venture with insurance provider Covermore.
Agents have to undertake rigorous online exams, devised by Advantage, to be allowed to sell the consortium’s insurance products.
Advantage managing director John McEwan said agents would increase revenues by selling policies unrelated to travel arrangements and would be prepared should ABTA lose its FSA exemption. The deadline for submissions to the Treasury on the exemption was yesterday.
McEwan said: “It would be expensive for any single agent to become FSA accredited. And the industry may be forced to go down this route anyway.”
So far 20 members are signed up but Advantage is confident the “vast majority” will follow suit. McEwan admitted moves away from ABTA regulation does “beg the question” of whether the exemption should remain.
Thomas Cook head of financial services Neale Vickery said ABTA’s scheme limited its growth plans and meant it could not compete with supermarket chains.
“If we are going to be successful in our financial services ambitions we need to get beyond our travel customers,” he said.
“The current limits mean some of our best customers get penalised because we can’t sell the cover they need.” ABTA denied its continued FSA exemption was undermined and said it wanted to represent the majority of agents selling travel insurance.
It backed the Co-operative Travel Trading Group’s call this week for a common code of practice, across all agents, to govern insurance sales as an alternative to FSA regulation.