Bangkok--Mar 6--Thai Airways
The Board of Airline Representatives Business Association today, 3rd March, 2006, called a press conference at the Head Office of Thai Airways International Public Company Limited to outline the details of the latest insurance programme arranged for travel agents who sell airline tickets through the IATA BSP (Billing and Settlement Plan).
For most travel agents the insurance programme means that they no longer have to provide bank guarantees to the IATA BSP, relieving travel agents of the administrative and financial costs involved. The exposure or risk is based on the travel agents’ average monthly sales over the past year, and as the new coverage limit is baht 50 million per claim, only the largest agents exceed these limits. These few very large agents are required to place bank guarantees for the amount of their average monthly sales over baht 50 million.
A decision was made to limit the single claim amount to baht 50 million in order to keep the cost to a minimum for the majority of the travel agents, reasoning that those whose sales exceeded this amount would have the financial resources necessary to arrange bank guarantees without undue hardship, and smaller travel agents should not be forced to pay for insurance in excess of their needs.
With the limit of baht 50 million per claim the premium amounts to baht 50 per ticket, and no aggregate limit under the policy. Mr. Chitvee Leelasiri, Thailand Country Manager for IATA, explained that although the BSP settlement is on a 15 day basis, travel agents’ sales are monitored daily and once they reach 85% of their financial guarantee limit a warning is triggered, allowing time for cash payment to be arranged in the event that their sales exceed their normal average.
Mr. Brian Sinclair-Thompson, President of the Board of Airline Representatives Business Association, said that new insurance programme with a claim limit was essential because last year one agent’s default had caused a huge claim, which the insurance company had had to accept, but which resulted in the market becoming very unattractive to insurers, and without revision there was a danger of the market becoming uninsurable, which would have been detrimental to all travel agents.
Mr. Vasing Kittikul, Executive Vice President Commercial for Thai Airways International Public Company Limited, supported the new program because it kept the cost per ticket as low as possible, while being fair to the travel agents, since around ten of the largest agents account for approximately 40% of the BSP business and top 50 account for 70%. End.