The collapse of Thomas Cook this week has been a bitter blow for many holidaymakers, although the main impact is for staff who have lost their jobs with immediate effect. As regards holidaymakers, tens of thousands of people are being brought home, with some disruption to their original holiday plans of course. According to the CAA over 14,700 people were flown home yesterday and an estimated 16,500 will return today, as part of Operation Matterhorn.
What the failure of Thomas Cook does highlight is the usefulness of the ABTA and ATOL insurance schemes, which are funded by a levy on ticket prices, plus the value of travel insurance. Even if a travel policy does not reimburse you for every single extra expense, it is always a good idea to have something in place to help get you home, pay for extra nights accom, taxis to airports, food etc.
“Whilst this is a disappointing outcome for the company itself, this is an opportunity to highlight the benefits of insurance and provide a good news story for the industry. Insurers need to be proactive in their approach to remediation and repatriation; with 150,000 people impacted, this is a big story for the industry. It also highlights the need for smart contacts for insurance, such as auto rebooking of alternative flights to avoid being caught in the chaos.
“If we look at the numbers behind the problem:
• In 2017, 21% of people in the UK travelled without insurance. The highest was in younger travellers (40% in the 18-24 category)
• Single policies cost an average of £30.82 and annual, multi trip policies at £59.78
• 60% of the Thomas Cook customers are ATOL protected
• In 2017, it cost the Government £60m to bring Monarch Airlines customers home. That covered 100,000 customers. Thomas Cook impacts 155,000, so is likely to be significantly more
• In terms of customers yet to travel, it is hard to quantify the cost. The resulting increment to flight prices has seen customers paying an increase of 138% – 785% based on the price of their original ticket”