UK insurer axes Stella’s UK insurance cover
A report in the UK by TTG live says that a decision by leading travel credit insurer Euler Hermes to pull cover on Stella Travel Services (UK) has been blamed on an increasingly “twitchy†financial services sector.
Euler told clients last Friday it had pulled cover from Stella Travel Services (UK), which owns Global Travel Group, Travel2 and Harvey World Travel.
Stella issued a statement to TTG reassuring trade partners all bookings were protected, and its parent company was a large global concern that had the financial backing of one of the world’s largest venture capitalists.
Industry observers said the decision was a sign of how nervous financial institutions have become about travel, particularly after the failure of the XL Leisure Group last month.
Stuart Jackson, Cosmos commercial director, said, “It’s indicative of what’s going on in the credit insurance marketplace.” “Based on the collapse of XL, insurers are taking a more cautious view.”
“We are all being viewed in a similar way.” “The financial sector is twitchy, and given the current economic climate probably rightly so.â€
Euler’s decision has caused a ripple of concern among Stella’s commercial partners TTG has spoken to this week, although the financial health of the company was not being doubted.
The firm’s Australian parent, Stella Travel Group, is owned by CVC, which also owns Formula One and Debenhams. A source close to Stella said CVC, “has more money than the Bank of Englandâ€.
Alan Bowen of AGB Associates, a legal advisor to the Association of Atol Companies, said, “XL has scared the banks clearly, and the insurance industry itself is in difficulties.”
“There is a wider issue of how much risk insurers ought to be taking.” “XL clearly did not help.â€
A Stella spokesman said its ABTA and ATOL bonding was “far more relevant than credit insurance, and requires greater business stabilityâ€.
“All Stella Travel Services businesses are operating as usual and both agents and consumers can book all Stella Travel Services products with confidence,†he said.
No one from Global wanted to comment on Euler’s decision but the company pointed out that all of its supplier pipeline monies were secure under its client accounts system and that anyone taking out additional credit insurance was, in effect, double bonding.
Euler did not respond to TTG’s request for a comment.
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