More insurance policy providers are expected to enter the supplier failure market this year after the small number of company failures in 2012.
Trade broker Rock Insurance said with just two suppliers in the market – International Passenger Protection (IPP) and Northern and Western Insurance Company (NWIC) – there was a need for more competition.
Antony Martin, Rock managing director, said the firm was fielding an increasing number of inquiries about supplier failure policies from the trade.
“With all the changes going on with the CAA [which runs the Atol scheme], we can only see that increasing.
“But we still need more insurance partners supporting these types of products. The choice that agents and we have to acquire these products is too limited.”
Martin said he felt the actual level or risk had been shown to be lower than was being reflected in the insurance market.
“Most of the failures that were going to happen have happened,” he added.
“Last year was challenging. If firms were going to fail they would have done last year, but they didn’t. I would not be surprised if someone comes into the market this year.”
Rock has been working with NWIC for three years and Martin defended its record after questions were raised when it entered the market.
“The acid test of any insurer is their ability to pay claims. NWIC has paid out year on year including a number of reasonably sized claims. We have found them a reasonable partner to work with.”
Martin said Rock’s focus this year was on developing new products, but he urged agents to place greater emphasis on boosting income by selling ancillaries.
“Every day you hear about people dropping commission levels, but there are a lot of ancillaries for agents to sell.
“With travel insurance it’s not an add-on it’s an essential and we see so many people without the right insurance. It should be made compulsory.”