TAAI Contemplates The Launch Of An Insurance Scheme In May

Charmaine Fernz - Mumbai

Rajinder Rai

At a recently concluded meeting in Mumbai of the Travel Agents Association of India (TAAI), president, Balbir Mayal, announced the association’s decision to consider an insurance scheme as an alternative to the current joint bank guarantee scheme.

“After having considered many insurance companies, we have finalised on Bajaj Allianz. For this scheme, BSP India would be the middleman and we are working closely with Air-India. Subsequently, we are looking at launching the same by May 15,” said Mayal.

Elaborating on the benefits of the insurance scheme, Mayal said, “The offer would certainly help agents as they would have to pay just one per cent net payment of the annual turnover as an annual premium to BSP, which is more feasible than the joint bank guarantee. One would also not have to go through the nuisance of colaterals, legalities etc.”

Having contemplated to launch this scheme, the travel agents fraternity is still undecided. Lets have a brief glimpse of what the industry has to say:

Rajji Rai, chairman, TAAI, Northern Region: Well, as the representative of TAAI for the Northern Region, I must say that it is a novel and innovative idea and I think it is a 'thing' for future and shows the TAAI's concern for the agents. But if you ask me this question in capacity of a travel agent then I must say that I am little sceptical.

So I really want to wait and watch how successful it is and keep my options open. If it works well I will join but till the time it doesn't, I will go for the joint bank guaranty. To understand the logistics and why I am sceptical about it is that in a joint bank guaranty I have paid 3 to 4 lakh rupees and till date I am leading a hassle free business. But now with the new scheme, I will have to pay 1 per cent of the annual turnover, which means that annually it could mean more Rs one lakh depending on the kind of business I do. So it does not make effective business sense.

Bhagwan Kanuga, honourary secretary general, TAAI: If the scheme is implemented it would be a better option. However, one has to wait and watch as well as gauge the percentage of premium to be paid. The secondary question is who pays the premium?

Ritika Modi, regional president, Uniglobe Travel (South Asia) Pvt Ltd: I think it is highly beneficial for the agents and airlines as well. World over there is no bank guaranty but instead there is insurance coverage. The one per cent premium is beneficial for the smaller agencies. And you do not have the botheration to get the bank guaranty renewed.

Bank guaranty is fine as far as older agencies are concerned but new players will always come with new formulas. It is like a medical insurance. However, the insurance company has to come up with attractive schemes.

Ratan Marrott, MD and chairman, Marrott’s Travel Express P Ltd: If one has to evaluate both options an insurance scheme is any day better than a joint bank guaranty. It is also a fact that both TAAI and TAFI are contemplating on the introducing the insurance issue in their respective associations. However, the insurance scheme works out a bit expensive for an agent shelling out one per cent premium.

Homa Mistry, regional manager, Northern India, Travel Corporation (India) Ltd: TAAI is an organisation that demands benefits for the travel agents. The association is introducing an insurance that covers agents and at the same time is not holding lot of money, which is beneficial for the larger masses. It is a wait and watch situation, nevertheless a positive step.

S Talwar, regional director - India, Air-India: At present, I have not gone into the details of the insurance scheme, it still has to be checked out by BSP India and only after that would we be able to take a decision. In any case, it is a better option.

(With inputs from Jyoti Koul, New Delhi)