Abta has approved two new bond providers, substantially increasing bonding capacity by raising the number of providers to the sector to five.
However, Travel Weekly understands bond issuers remain cautious about providing financial security for Atol protection until they know the outcome of the CAA’s current Atol reform process.
The CAA has proposed substantial changes to the Atol regime through a mix of client money segregation, bonding, insurance and a variable, risk-based Atol Protection Contribution (APC), acknowledging the changes could amount to the biggest in the scheme’s history.
Abta notified members last week that it has approved bond providers Accredited Insurance Europe, working with insurance broker First Underwriting, and AXA Insurance UK, through broker Towergate Travel.
Rachel Jordan, Abta director of membership and financial protection, confirmed approval of the additional bond providers and said: “We’re also in the final stages of approving a financial failure insurance (FFI) provider and will name them on our approved provider list once our internal processes are complete.”
She told Travel Weekly: “It’s very good news for principal members ahead of the next peak-renewal cycle, which starts in June, and very good news for retail members whose bonds renew throughout the calendar year.”
However, the approvals come too late for members renewing bonds in March. Speaking on a Travel Weekly Future of Travel webcast on Atol reform ahead of confirming the bond-provider approvals, Jordan insisted “the appetite is there” in financial services to work with travel businesses.
She said: “Things are looking up on bonds and insurance. Where we are is very different to how it was when the first Atol reform consultation paper came out [in early 2021].”
Jordan suggested that when Abta members have a choice of bonding, insurance or trust arrangements to provide financial protection “a lot come back and say ‘bonds are cheaper’.”
She noted Abta has hosted a series of financial protection workshops and said: “What has come out of our workshops is that financial services providers will bring bond capacity to market if the demand is there.”
The CAA extended its deadline for responses to its latest Atol reform proposals, published in January, last week. The deadline was extended until March 31.
More: Special Report: CAA asserts case for change on Atol