Agencies could face a hike in the cost of supplier failure insurance after the leading provider pulled out of the market having had to pay out after a flurry of travel company collapses.
The firm gave agencies 14 days’ notice of cancellation this week of its supplier failure insurance and complete supplier failure insurance products.
In an email, IGI confirmed the move would not affect valid Goldtrail claims, although it is understood there is still a question mark over whether the company will pay out on some pending claims.
IGI Insurance, which changed its name to AmTrust Europe last month, was the larger of two supplier failure insurance providers in the market. It had already pulled out of scheduled airline failure insurance in May following the ash cloud crisis.
The only other supplier is International Passenger Protection.
Rock Insurance managing director Antony Martin admitted IGI’s move would push prices up, but he hopes Rock can plug the gap with a new product.
It has secured a supplier failure product through Northern & Western Insurance Company (NWIC), and is in the process of moving its customers over to this underwriter. The new product, Complete Financial Protection, will be available to customers and to the trade.
“Rock has been working with NWIC over the past six months to create new products to fill the gap that has been left by IGI. We have signed a three-year contract for them to write supplier failure, airline failure and disruption insurance.”