News
O'Connors works with travel companies to increase customer insurance returns
O'Connors has been monitoring very closely the FSA’s changing regulatory approach to travel companies and the impact this is likely to have on the profit that travel companies will make from the sale of bundled and non-bundled customer insurance from January 2009 onwards. Most travel companies are well advanced with their strategic thinking as to what regulatory status to adopt going forward and our insurance team has been working with a number of such companies to help them select the right status for their business and start putting in place appropriate systems and controls to meet their impending new duties and responsibilities - the new regulatory regime now being less than 7 months away.
Perhaps more interestingly, we have been exploring how travel companies might re-structure their commercial arrangements with supporting brokers and/or insurers with a view to improving the financial return they make from customer insurance sales. Already a very important revenue line for the travel industry, the sale of insurance is set to become increasingly so as travel companies look to expand their trusted brand into the wider general insurance marketplace.
From our work in the travel sector (and indeed other industry sectors), it has become clear to us that there are significant opportunities to increase such financial returns in a way that is robust from a commercial, legal and regulatory perspective. For some, the annual profit improvement can be in excess of 20%, though the scale of the profit improvement naturally depends upon the current arrangements that are in place and, in some cases, the degree to which the company has an appetite for risk-reward. For example, one of our areas of expertise is captive insurance and protected cell structures which can offer opportunities for long term control and investment returns that simply cannot be matched by traditional structures – something that not many companies are told about by the insurance world.
To discuss on how our involvement might benefit your business, please call Nigel Wallis on 0151 906 1000.
