Daily Insurance Industry News
Daily Insurance Industry News
Monday 20th of May 2019
July 16, 2009

Atol levy increased as ABI predicted

by Gill Montia

Story link: Atol levy increased as ABI predicted

The Government has announced a rise in the levy on package holidays that exists to cover losses from the financial collapse of tour operators.

From October, travellers who have booked package holidays will have to pay an extra £1.50 under the Air Travel Organiser’s Licence (Atol) protection scheme, taking the cost per individual to £2.50.

The increase follows huge claims made after last year’s failure of XL Leisure Group.

Transport Minister Paul Clark told the BBC that the scheme still represents a good deal for consumers, costing less than 0.5% of the average Atol holiday price.

However, the Association of British Insurers (ABI) has accused the Government of having failed millions of holidaymakers by replacing insurance-backed Atol Bonds with the flat £1 levy, in 2007.

According to the Association, insurers warned the Government and the Civil Aviation Authority that the new scheme was flawed and that the levy would prove insufficient.

The ABI’s director of general insurance and health, Nick Starling, says: “We warned at the time that airline and tour operator failures would become more frequent without the strict entry requirements demanded by the insurance industry within the previous insurance bond system, such as financial scrutiny and robust business models.”

In other ABI news, the body has announced the appointment of Clement B Booth to its board.

Mr Booth is chairman of Allianz UK and a member of the board of management of Allianz SE.


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