THEY say there is never a dull moment in politics, but from my perspective, the same can be said about the travel industry. I say this as a result of the reforms that may be taking place within the travel industry off the back of the Hayne Report (The Banking Royal Commission).
Most, I am sure, would not have thought that travel would end up in the spotlight, but as it turns out, travel insurance and in fact the ability for travel agents to offer consumers payment deferral options are under review.
The Federal Treasury is currently in a deep-dive review of what is known as Add-On Insurance (AOI), and travel insurance is the largest form of AOI in the economy. In essence, the government is considering implementing rules and new arrangements in the process of the sale of travel insurance which may impact on travel agents and other suppliers of travel insurance. Importantly, the government is in a consultation mode, and AFTA has provided a detailed submission in response to the call made by Federal Treasury.
CLICK HERE for the submission. AFTA has made the critical points that the current sale arrangements of travel insurance by travel agents offer good value for money and a competitive marketplace. Travel insurance is well understood by consumers when a travel agent is involved, and any change to this process may impact in a way that would leave many outbound Australian travellers under-insured or without a fit-for-trip policy.
These are all very important points and we hope that this work AFTA is advocating for will enable the government to see its way clear to enable a statutory exemption for the travel agent sales process from the proposed changes.
It is a very technical area of the economy, and insurance of all kinds are well and truly in the sights of the government as a part of the many reforms being proposed by the Hayne Report.
We will be taking a very close watch as this process unfolds as we do see a clear and present danger of change resulting in bad outcomes for Australians.
The second current issue under review is the sale by retailers (travel agents falling into this category) of financial products that provide consumers with delayed payment options.
This is not a challenge only faced by the travel industry as the Hayne Report recommended that the exception for retailers to offer these types of products be withdrawn, meaning that only a person who holds a financial service licence would be able to offer such a product.
It is early days in the process and again, AFTA will be on the front foot reviewing and consulting with the federal government on what would be best practice and suitable outcomes for the good of the consumer.