Travel agents are failing consumers by not offering holiday insurance.
Rock Insurance managing director Antony Martin has urged agents not to be put off selling insurance since new regulations came into force on January 1.
The rule change means insurance is now regulated by the Financial Services Authority and agents can no longer sell it unless they are authorised or act as the appointed representative of an insurer or an insurance broker.
Martin said he has noticed a single-digit drop-off in the number of travel agents booking insurance through his company since the year began.
He believes 30%-35% of travel agents are not selling insurance, with the majority of these being independents. Martin argues this is the wrong message for agents to give out in the wake of the XL Leisure Group failure in September 2008.
He said: “Agents see [selling insurance] as another hassle, but the economic environment we are trading in means there are inevitably going to be more company failures.”
He also warned that an increasing numbers of people may try to fraudently claim on their travel insurance in the current tough economic climate.
He said: “We may see insurance claims increase as people will be more creative about [making them]. This will put insurance premiums up.”
Under the new insurance regulations, travel agents are able to sell annual insurance to customers at any time. Previously they were only able to sell annual insurance policies when booked at the same time as a holiday.