Growing Bankruptcy Risks Concern Travelers & Companies With Potential Losses in the Multi-Millions

RICHMOND, Va., Feb. 23 /PRNewswire/ — The travel industry is increasingly challenged by the specter of industry-related bankruptcies and financial defaults. The US Travel Insurance Association (UStiA) will address this topic in a two-part segment on travel company bankruptcies entitled “How Big is the Risk” and “How to Best Protect Travelers.” The discussion will be one of several topics covered during the UStiA’s upcoming conference, March 3-6, at the PGA Resort in Palm Beach, FL.

“In recent years the travel industry has seen the closure of many businesses, including airlines, cruise lines and tour operators, closures that have left travelers stranded both physically and financially,” said Jon Ansell, UStiA President. “Travel insurance companies, which provide protection to consumers when these companies fail, face a complex challenge of meeting customer expectations and sensibly managing a business fraught with increasing risk.”

For example, five US airlines are currently in bankruptcy (US Airways, United, Hawaiian, ATA, and Aloha) and others are in serious financial straits. In the past five years, many tour operators or cruise lines filed for bankruptcy or closed their doors, in some cases marooning travelers and costing millions.

Moderated by Ansell, the Travel Industry Bankruptcy Session will feature:
* Leading transportation economist Dr. Aaron Gellman, Professor of
Management & Strategy, Kellogg School, will address the “Size of the
Bankruptcy Risk.”
* A follow-up panel discussion focusing on “How To Best Protect
Travelers” will include several experts describing different
solutions:
* Samuel Podberesky, Asst. General Counsel, US Dept of Transportation,
will talk about consumers’ “right to alternate carriage” when a
bankrupt airline ceases operations.
* Peter J. King, Deputy Director, Bureau of Certification & Licensing
of the Federal Maritime Commission, will address the multi-million
dollar FMC bond, its protections and limitations.
* Bill Hardy, Director of Insurance Services for AAA, will speak about
the company’s screening program and arrangements with preferred
travel companies.
* Robert Thompson, Vice President and CFO of Lindblad Expeditions and
a member of the US Tour Operators Association, will describe the
USTOA’s $1 Million Travel Assistance Program.
* David Bloom, Vice President of Underwriting for Access America, will
discuss the company’s unique supplier financial screening program.
* David Stirling of Crispin Speers & Partners Ltd. will address issues
of reinsurance.

“The threat of travel company bankruptcies has not been fully and candidly discussed in our industry,” Ansell explained. “We want to put the issue on the table and, as time allows, explore ways in which we can better protect travelers and manage the risk to our companies.”

The UStiA conference will address other key issues, including terrorism and travel, insurance regulation, emergency assistance and claims fraud.

About the US Travel Insurance Industry

Travel insurance offers an unusually broad range of benefits and services. Bundled together to meet travelers’ distinctive needs, travel insurance can include assistance services such as worldwide emergency hotline services and medical evacuation, along with insurance benefits for cancelled or interrupted trips, medical and dental emergencies, lost or damaged baggage, rental cars, travel supplier bankruptcies, and more. Travel insurance is distributed by travel agents, airlines, cruise lines, tour operators, credit card companies, insurance brokers and over the Internet. The UStiA is a national non-profit organization with a mission to foster ethical and professional standards of industry conduct, cultivate effective state and federal government relations, inform and assist members, and educate consumers. For more information, visit http://www.ustravelinsurance.org/

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