It was not so long ago that Steve King of JSInsurance (Travel Weekly June 28) said that he would have to “go direct”. Now, he “will not turn his back on the trade”. Has he forgotten that certain brokers, who can remain nameless, entered the market with a very low-cost strategy, taking up large chunks of the retail sector?
Why not accept that it was strategies such as these that have given rise to the very problem that Steve perceives. Does he not agree that with cheap rates come restrictive policies in most cases. If the underwriter has lost money, the rates have to go up. If they go down then the cover is compromised – always.
A travel agent is in the business of selling holidays. Before the advent of these restrictive policies and low premiums, agents did not have to rely on commission from insurance to keep going. Commissions of 37.5% were the norm, policies were less restrictive and there were fewer complaints. Any agent is bound to be attracted by the lowest price for what they may believe to be just another travel insurance. Surely Steve does not expect them to know the policy as well as he does. The problem, Steve, is not the agents’ fault.
And what about proper explanations. Did these brokers explain to the agents how restrictive the policy was and why the rate was so exceptionally low, when the agents were snapping them up. So why expect the agent to do just that? If the policies were explained fully there would be no ‘financial burden of complaints against them’ as it is likely that the agent would not have taken on such a restrictive scheme in the first place.
As a travel agent sells a flight ticket, he cannot be expected to know the technical specifications of the aircraft. And so when insurance detail or any other holiday component require explanation, they should turn to the supplier for the correct advice. That is what we are here for.
Regulation by a body, other than the Government, is not something that ‘should strike fear into the heart’ of any agent. It’s the broker and intermediary who needs regulation as it is his product and advice that must meet standards.
The responsibility that remains with the agent is that of selecting an insurance product that is fair in its conditions and reasonably priced, not just the cheapest. Agents, remember the principle – Caveat Emptor, buyer beware.
Philip Bacon
Global Travel Insurance
Worthing
West Sussex