Abta has rejected allegations it has “increased bonds when companies can least afford it” to protect its own insurer.
Chris Photi, head of travel and leisure at White Hart Associates, described Abta’s September bonding renewal as “a bloodbath” and said: “Abta is seeking to protect its captive insurer and the only way to do it is to increase bonds.” A captive insurer is an insurance company owned and operated on behalf of those it provides insurance for.
Photi told a Barclays travel industry webinar: “Abta is fighting to increase bonds when companies can least afford it to protect a post‑Thomas Cook captive insurer.
“How much does the captive insurer hold? It had £22 million, but we’ve had Thomas Cook and other failures since then.”
He argued: “Abta needs to be more transparent.”
Abta director of financial services John de Vial rejected the allegations, telling Travel Weekly: “Thomas Cook did not cost Abta a penny. There were no costs in excess of the bond. It’s a completely unfounded concern.
“It’s not unreasonable to ask ‘is there a problem?’ But the answer is ‘no’. There was no cost whatever to Abta from Thomas Cook.”
De Vial rebuffed the allegations of a lack of transparency, saying: “We publish consolidated financial statements every year on the Abta website before Christmas. We will do the same this year.”
He also rejected the claim that Abta had ratcheted up members’ bonding requirements, saying: “It is not Abta arbitrarily hoicking bonds. This starts with the legal position. Businesses have to provide sufficient funds to protect consumers.
“You don’t need an increased bond because failure is more likely, you need an increased bond if more money is being held, if customers are keeping their options open allowing companies to hold their money. What is driving it is compliance with the law. If there aren’t sufficient funds when someone fails, it would be a disaster for confidence in the sector.”