Changes in the way agents are allowed to sell travel insurance from January 1 2009 mean they will have a chance to grab a slice of the £42 billion general insurance market.
Acumus Insurance Solutions managing director John Bibby said only a minority of the more than 6,000 travel agents in the UK have understood that AR authorisation allows them to sell a range of general insurance products.
He said: “Just as supermarket chains are white-labelling financial and insurance products as a source of extra income, it is the next step for travel organisations to tap into a broader range of insurance products.”
Bibby said this might include home emergency cover while the client is on holiday, an annual private medical policy, wedding insurance for couples planning to tie the knot overseas or pet insurance.
The new rules also mean that agents registered with the FSA or who have become ARs can sell travel insurance to anyone, not just their own clients at the time the client is buying a holiday, as is the case now.
Thomas Cook has already spotted the opportunity and become the first major travel company to gain AR status (see separate story). Intermediaries have been able to appoint ARs since 2004, but few have done so because of the heavy liability it places on them.
Journeys Travel Insurance managing director Patrick Chong believes the new regime will enable agents to make more money from selling travel insurance. He said: “From January 1 2009, agents will have a level playing field with the direct-sell companies, banks and supermarkets. No one will be able to attack agents because they are not regulated.”
Chong said he knows of agents who are planning to reduced their margins on travel insurance to lure clients to buy a holiday. “These agents are creating a booking opportunity. I believe agents will have a chance to increase their conversion rates in 2009, but getting the price right is key.”
Holiday Extras said it will pay agents 20% commission for referrals and further commission on policy renewals.
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