INSURERSshould be able to resell holidays that have been cancelled, Mercury International Assistance managing director Carl Carter said.
At the moment, a cancelled holiday goes back to tour operators to be resold at full price.
The insurance industry believes it should be able to resell it as it owns the package having paid the cancellation cost.
He said: “Some £100m of insurers’ money goes on cancellation claims, but tour operators and airlines profit as they can resell it
“Consumers don’t even get a discounted rate on a holiday that has already been paid for.”
Miller Firstline deputy managing director John Parkinson said the cost to an insurer of setting up a travel agency to resell holidays would eat up any profits gained.
The UK Office of Fair Trading is currently investigating tour operator cancellation fees.
From next year, the Consumers’ Association and Trading Standards authorities will have the power to take legal action over operators’ terms and conditions in their brochures.
The UK’s Federation of Tour Operators warned that if changes are made to cancellation charges, consumers will have to pay more.