A new insurance scheme offering a cost-effective alternative to bonding for agents selling rail tickets has been launched by the Association of Train Operators (ATOC), in conjunction with the Guild of Travel Management Companies (GTMC) and Advantage Travel Centres.
All ATOC-licenced Travel Management Companies (TMCs) are now required to provide some form of financial guarantee against settlement default. Up until now this has generally been in the form of a financial bond.
The new ‘Travel Agents Reserve Insurance Fund’ (‘TARIF’), which was introduced on 1 May, offers TMCs an alternative approach by participating in an industry-level insurance scheme. Membership of the scheme is based on TMCs paying a levy into a central fund which is used to pay for commercially-procured credit insurance.
Representatives from train companies, ATOC, Rail Settlement Plan (RSP), GTMC, Advantage Travel Centres and The Association of British Travel Agents (ABTA) will sit on a joint board formed to oversee the management of the scheme.
For many TMCs, participation in TARIF is cheaper than obtaining a bond and around 150 TMCs, representing around £340m of rail sales, have already elected to join the scheme. It is envisaged that the cost of the scheme will reduce over time delivering further savings to TMCs compared to the cost of a bond.
The scheme has taken a year to develop after close collaboration between ATOC, RSP the GTMC and Advantage Travel Centres.
David Mapp, Commercial Director for ATOC said:
“TARIF offers TMCs a real alternative to bonding and I am delighted that around 150 agents have already decided to join the scheme. The introduction of TARIF on 1st May was the culmination of a year’s very effective collaboration with our partners in the GTMC and Advantage Travel Centres”.
Anne Godfrey, Chief Executive of the Guild of Travel Management Companies said:
“I would like to thank GTMC and Advantage members for their hard work, over many months, without which this solution would not have been reached. Together with ATOC we have shown what can be achieved when representative bodies work together to resolve complex industry issues.”
Ken McLeod Corporate Director of Advantage Travel Centres said:
“We are pleased to have worked in conjunction with GTMC and ATOC to resolve what has been a difficult and challenging task in satisfying all parties. We can now move forward with the formation of the joint board to continue the progress we have made so far.”
