Northern & Western Insurance Company (NWIC) has paid out more than £200,000 on industry claims in the past six months, allaying concerns about its reliability.

The company is one of only two underwriters of supplier failure insurance – the other is IPP.

The dearth of underwriters has made premiums more expensive, a key concern for agents who require the cover for sales of Flight-Plus holidays.

Advantage Financial Services announced this week it will offer supplier failure insurance to non-members from March 1 and confirmed the cover will be underwritten by NWIC, whose willingness to pay out has been questioned and was the subject of a critical article in Insurance Times last year.

However, David Sharp, Advantage’s financial services director, said: “Northern & Western pays claims where they occur. We have had no problem.”

He confirmed NWIC had paid £50,000 to Advantage members, including £16,000 on a single claim by Stewart Travel.

Rock Insurance Services managing director Antony Martin went further, saying: “Northern & Western has paid out claims in excess of £200,000 in the last six months.” He added: “The acid test of an underwriter is the desire to pay out claims.”

The news should reassure agents. Advantage has provided supplier failure cover to members selling separate flights and accommodation for two years, but only 30 have taken it.

Advantage directors were considering options for helping members comply with Flight-Plus licensing this week, following Abta’s confirmation that it is near to finalising a joint arrangement with the CAA.

Advantage chief executive John McEwan said: “We don’t want to duplicate efforts.”