HolidayTravelWatch calls for the continued Regulation of Travel Insurance sales!

HolidayTravelWatch attended the latest Know Before You Go (KBYG) event, hosted by the Foreign & Commonwealth Office in London on Monday (2/12/13).  The event takes place each year and provides an opportunity for members of the Travel Industry to meet and discuss the years events and also to hear of the progress of the UK Consular Service.

During the presentations, several questions were raised with the Minister, The Rt Hon Mr Mark Simmonds MP.  One questioner raised the point that 'due to the dramatic fall in travel insurance sales', what was the government going to do about de-regulating the sale of Travel Insurance?

This is a longstanding argument which has its roots back in 2006, when the Travel Industry and this Organisation, presented its reports to The Treasury Select Committee and the then FSA. During verbal evidence to the Committee, HolidayTravelWatch called for the Regulation of Travel Insurance sales.  Its rationale was simple; Travel Insurance is a vital product and the consequences of either not having a policy or indeed not having the correct cover can be catastrophic!

The government of the day agreed, but elected to adopt a light-touch form of Regulation.

The argument raised principally by the Travel Industry is that they are seeking to cut out this form of 'Red-Tape' and are seeking the government's ear who are keen to rise to the challenge!

Another argument raised is that there is a fall in the sale of Travel Insurance. As was evidenced in previous KBYG events, information was presented to demonstrate the success of the sale of Travel Insurance.

HolidayTravelWatch considers that the argument of 'Red-Tape' is a misnomer when the actual argument is that the Travel Industry is apparently not keen on embracing a Regulatory environment; an environment which we have investigated and discovered that it is not as onerous as apparently believed. It is this Organisation's view that embracing Regulation can actually have a positive effect on a business's marketing to Consumers.

These arguments also present the curious situation in that up until the end of 2011, the sale of Travel Insurance had apparently increased from 72% in 2008 to 89% in 2011 as is evidenced by the presentation at the 2011 KBYG meeting!

This raises the following questions:

  1. How far has the sale of Travel Insurance fallen?
  2. What is the evidence?
  3. How does any claimed fall correlate with any fall in the activity of the FCO or the KBYG Campaign in promoting Travel Insurance to Consumers, and
  4. What evidence can the Travel Industry produce to support their claim that the current light-touch Regulation scheme is onerous?

This Organisation believes that the introduction of Regulation has greatly aided Consumer Protection, by elevating that product, with all the checks and balances that Consumers have come to expect in other Insurance products that they purchase.

Frank Brehany, the Consumer Director for HolidayTravelWatch states:

"I suspect that this 'campaign' by the Travel Industry has a slow-drip process about it. We must all be on guard against any attempt to de-regulate this important product. The Industry claims that no detriment was suffered by Consumers, but that depends on how you define detriment and that was clearly the view of Parliament and the FSA. I call on this government to block any attempt to de-regulate this product and place Consumers concerns and experiences at the heart of this debate!"

Tags: Travel Insurance Financial Protection Treasury Select Committee FSA Consumer Protection KBYG FCO