Supplier Insolvency Insurance products:‐

Scheduled Airline Failure Insurance (SAFI)End Supplier Failure Insurance (ESFI) 

Travel Agent & Intermediary Failure Insurance (TAIFI)For 

In association with

July 2014

About International Passenger Protection Ltd (IPP)

Formed in 1990, some 23 years ago after identifying a lack ofconsumer protection

IPP are the oldest and Worldwide leader in providing financialfailure insurances to the travel industry

IPP have Pioneered all their products including IPP operate in over 30 countries around the world

IPP cover more passengers in the UK than the CAA or ABTA IPP cover thousands of Travel Agents around the worldFor example –80% of Travel Agents in India, Czech Republic, Slovak Republic90% of Travel Agents in Kenya, Uganda & Tanzania

Insured through International Passenger Protection

Security

IPP is an Underwriting Agency, Lloyd’s Cover holder andregulated in the UK by the FCA

A rated security ‐ Insurers and Reinsurers with combined netassets in excess €100 Billion

IPP are a cover holder for Liberty International Underwriters(AM Best A rated).

Liberty International Underwriters is part of Liberty MutualInsurance ‐ a Fortune 100 company that's more than 100 yearsold.

Appointed by AFTA to bring solutions together for their members

Agents for IPP in processing applications for IPP’s various products

Applications, premiums and enquiries to go through Gow‐Gates

Gow‐Gates is regulated by Australian Securities and Investments Commission (ASIC)

Specialists in Travel Agent & Tour Operator products  

Protect or NOT, you have a choice !

ATAS provides a strong platform for consumer recognition ofprofessional conduct and business ethics, and can strengthena business’ reputation and value proposition to the customer.

Benefit of being an ATAS participant means you have a choiceto protect your monies and that of your customers in theevent of insolvency.

Thus an ATAS participant has the choice to sell a financiallyprotected or unprotected holiday ‐ You control the way youwish to sell your service.

IPP at the request of AFTA through Gow‐Gates have brought tothe market three key products for ATAS participants ….

‘Optional’ ATAS participant products

What do these products cost ? IPP is not replacing the TCF but providing a range of insurancebacked commercial solutions to support the industry

Your business is not the same as the next agent Your risk requirements will be different We need to know your risk requirements in order to give aquotation

Premiums are not the same for all, few people drive a Ferrari andmany drive a Toyota, why should a Ferrari driver pay Toyotaprices !

Thus ensuring a fair premium for a fair risk for all

next collapse ?

Travel Agent concerns

Customers stranded abroad

Customers contacting agents to bring them home or refund tickets whether the agent is liable or not

Repatriation can cost up to 3 times original ticket cost

Credit card charge backs to travel agent where customers go back to their bank

Current and past oil prices and global economic climates continue to put strain on airlines

Which airline will collapse next – who is safe ? 

Can Agents afford to pay out for their customers losing their money, especially from a large collapse ?the next collapse ?

Some past and recent Airline Collapses

• One policy to an ATAS participant covering them for lossesarising from the insolvency of an airline

‐ If insolvency occurs prior to travel then cover is for thecost of the original pre‐booked flight

‐ If insolvency occurs during the trip then cover is for thecost of the return flight (equivalent class cost) up to theper ticket policy limit

• The ATAS member is the Insured, Policyholder and beneficiary

• The risk is the declared and agreed ‘Scheduled Airlines’

• Premium to be charged on all tickets to ensure lowest cost

Scheduled Airline Failure Insurance (SAFI)

24/7 Airline Alert Service

ATAS policyholders benefit from IPP’s 24/7 Airline Monitoring Systemwhich will alert the ATAS Policy Holder of potential threats of and actualAirline Insolvencies.

Alerts will confirm necessary procedures required by the ATAS PolicyHolder in handling claims

Alerts will confirm if an Airline is defined as not covered for tickets beingissued going forward

The ATAS Policy Holder makes their own commercial decision to continueselling that airline or not without cover.

Agents rely on this service so they can take appropriate steps to avoid theircustomers being inconvenienced and unnecessarily panicked before theytravel or are stranded abroad.

What Does SAFI Cost ? Your business is not the same as the next agent Your risk requirements will be different You will sell a different pattern of airlines compared to another agent

therefore your risk will be different. We need to know your risk in order to give a quotation Premiums are not the same for all, some agents sell a lot of Emirates and

others may just sell ‘Dog Airlines’ as an example Thus ensuring a fair premium for a fair risk for all agents.

Can I pass the cost on to customers ?You cannot pass the cost on as an insurance policy as this is a regulatedactivity but you will be taking on the policy for your own benefit in order tobe in a position to refund or cover costs for repatriation.

Therefore you have two options:‐1. Pass the cost on to ALL passengers as a “Airline Failure Administration

Fee” , “Airline Failure Fee” or “Repatriation Administration Fee”2. Do not pass the cost on and absorb within your business running costs

AFTA is developing policy for consideration by government to allow SAFI andESFI to be passed onto customers on an optional basis.

Jo Blogg’s Travel

INVOICE

TicketSydney – Singapore – London returnBusiness Class Qantas AUD $4,000

Taxes AUD $   600Service Fee AUD $   200Travel Insurance AUD $     30

*

Total AUD $4,835

*   Airline Failure Administration FeeJo Blogg’s Travel have taken out an insurance policy with Liberty International Underwriters through International Passenger Protection Limited to cover the insolvency of your Airline …………………. (full marketing wording)

Does SAFI cover me against charge backs ?Yes ! – if you have a SAFI policy you can immediately contact your clients torefund or repatriate your customers which will be perceived as a greatcustomer service and prevent customers from having to go back to theirbanks and invoking a charge back to your agency.

Will all airlines be covered ?Generally we cover the majority of airlines, there are sometimes a fewairlines we have to exclude because either there is a threat of insolvency inour opinion or an airline has filed for insolvency i.e. Chapter 11.

Is there an excluded airlines list ?ATAS policyholders will have access to a secure webpage confirming Airlineswhich are defined as covered Schedule Airlines, also they will benefit fromIPP’s 24/7 email alert system.

How do I make a claim ?Simple ! – one short claim form to IPP covering all your refunds andrepatriations or charge backs should a customer have automatically goneback to their bank.

IPP will remit funds by return direct to your account usually within 7 workingdays of receiving full claim documents

Application process through Gow‐Gates

One page simple application form to be completed andreturned to Gow‐Gates along with agents last 12 months BSPand NON BSP Airline Sales

Quotation given to agent with list of agreed airlines and limitsof cover which are usually based on 30 day sales exposure

Agents can decide to increase airline limits if required at thequotation stage or anytime during the policy by notifying IPPthrough Gow‐Gates to get agreement

Agent signs quotation and pays premium to Gow‐Gates, largepremiums can be paid on a monthly declaration basis.

Agent receives policy from IPP through Gow‐Gates with aschedule of Airlines and limits

Agent passing on an ‘Airline Failure Administration Fee’

‘Agency A’ ‐ Total number of air tickets per annum 24,000

SAFI Premium charge per passenger/ticket (* Price for demonstration only) AUD 2.50

Total Insurance Premium due  AUD 60,000

‘Agency A’ passes on an Airline Failure Administration Fee’ per customer AUD 5.00

Income from ‘Airline Failure Administration Fee’ AUD 120,000

PROFIT TO AGENT LESS COST FOR INSURANCE AUD 60,000

Insurance cost = ZERO, profit = AUD 60,000

To cover the cost of administrating such an insurance policy agents may wish to charge an administration fee to cover their costs

Scheduled Airline Failure Insurance (SAFI)

Cover Airline insolvency exposures

Protect against charge backs

Protect your profits

Protect your customers

Give a peace of mind promise to keep and generate

new customers

Create a new revenue stream

End Supplier Failure Insurance (ESFI)

• Extends SAFI cover to include not only airline insolvency but other ‘End Suppliers’ of the holiday booking such as:

HotelCar hire companyExcursion providerTrain OperatorCoach OperatorFerry operatorTheme Park

• One simple application form through Gow‐Gates supplying on a spread sheet all your end suppliers with annual turnovers.

Consumer Protection Insurance

• IPP have been providing consumer protection insurance for over 24 years

• IPP cover more passengers than the CAA and ABTA in the UK

• IPP believe in a fair premium on a per agency basis, not one rate for all

• IPP protect major customers of major travel brands globally…….

Travel Agent & Intermediary Failure Insurance (TAIFI)

Covering the Insolvency of the ATAS participant for the benefit of their customers

Must be ATAS accredited to apply

Must prove solvency of the business 

Simple application through Gow Gates

Financial assessment carried out by IPP

Premium on a percentage of turnover basis

Policy will cover all customers bookings while money is with the ATAS participant

Online sales reporting and premium payments

Customers will receive a certificate confirming the policy takenout by the ATAS participant

Policyholder is the ATAS participant whom pays the premium

Insurance allows ATAS participant to give a peace of mindpromise to its customers that their money is protected

In the event of an insolvency of the ATAS participant customerscontact the Insurer to make a claim for loss of monies whichwere still being held by the ATAS participant

Travel Agent & Intermediary Failure Insurance (TAIFI)

What Does TAIFI Cost ?

Your business is not the same as the next agent

Your risk will be different

You will run a business more or less profitable than another agency

You will have more or less cash in the bank than another agency

You will have more or less debt than another agency

We need to know your risk in order to give a quotation

Why should you pay the same premium as a business that is not makingprofits, losing money with low cash flow and bad debts

Thus ensuring a fair premium for a fair risk for all agents.

AUD 100 application fee which is refundable on acceptance of agreedcover

Thank you for your timeFor further information and application forms please contact:-

Rebecca Fleming(rfleming@gowgates.com.au) , Gow-Gates Insurance BrokersLevel 8, 491 Kent Street, Sydney NSW 2000.

POSTAL : GPO Box 4731 Sydney NSW 2000. TELEPHONE: 02 82679919 / FAX: 02 82679991

IMPORTANT‘Dog Airlines’ is a fictional name and does not represent any particular airline but merely

to demonstrate an agents diversity of airline sales.

NO DOGS WERE HARMED IN THE MAKING OF THIS POWERPOINT PRESENTATION