Mike Webb CEO provides his view on the Emergency Budget

Media Alert

IPT rise shouldn’t deter holidaymakers from buying travel insurance –
but anticipated taxes that will impact the airlines later in the year could hit the insurance industry

Mike Webb, CEO, Mondial Assistance provides his view on the Emergency Budget

George Osborne’s 2.5% increase on Insurance Premium Tax (IPT) from 17.5% to 20% for travel insurance is unlikely to have a negative impact on the travel insurance market, believes Mike Webb, CEO of Mondial Assistance in the UK. But he is concerned about the impact of airplane taxes expected later in the year, on the travel sector as a whole.

“Whilst it is disappointing that IPT has been raised, the reality is that it will add only a small additional cost to travel insurance premiums. And this should mean that travellers won’t take the risk of not buying travel insurance simply because of cost.

“But our advice continues to be that people should not be influenced by price alone when buying travel insurance. We urge those planning a holiday to always check that the level of cover offered is appropriate for the type of holiday they have in mind and the people to be included on the policy.

“However, what I think should be of more concern for the travel insurance sector, is the potential move later in the year for air passenger duty to be a tax per plane rather than per passenger. This could have a significant impact on choices available to travellers, as those less popular flight routes will become less economically viable for airlines to offer unless the cost is passed to the customer.

“So right now we need to keep a close eye on what the Chancellor plans to do next – and hope that he doesn’t see the travel sector as an easy target. The travel insurance industry in particular is a success for the UK and we would hope the Government does what it can to support and not damage its future.