The first travel services provider has availed of an individual guarantee to fulfil its obligations to travellers provided by the national development agency Investicijų ir Verslo Garantijos (INVEGA). ADB Compensa Vienna Insurance Group, which has a cooperation agreement with INVEGA, has provided the travel services provider with a suretyship insurance worth EUR 70,000, and 50% of this amount was guaranteed by INVEGA. A total guarantee budget of EUR 15 million was allocated to implement this measure.
“Our charge-free guarantees are aimed to help travel services providers to smoothly continue their operations,” said Kęstutis Motiejūnas, head of INVEGA. “We are currently cooperating with four insurance companies that provide suretyship insurance required for operations of travel services providers. By now, we have provided a guarantee to one travel services provider, and we are ready to promptly react to new applications.”
Linas Laugalis, head of the Underwriting Department at Compensa Vienna Insurance Group, agrees with the head of INVEGA on the importance of INVEGA’s guarantees.
“We closely cooperate with travel services providers operating in Lithuania and can see that the companies are now putting maximum effort to adapt to the current situation characterised by challenges and uncertainty. They need suretyship insurance to ensure their smooth operations and client security, and we therefore expect our partnership with INVEGA to be meaningful and to help travel services providers to deal with the consequences of the pandemic,” said Mr. Laugalis.
According to Mr. Motiejūnas, other insurance companies and financial institutions are also ready to contribute to government support for the tourism industry: starting from 17 July, travel services providers may apply for individual guarantees not only to Compensa Vienna Insurance Group but also to BTA Baltic Insurance Company, ERGO Insurance SE and ADB Gjensidige.
The guarantees intended to secure performance may be used either for acquiring new suretyship insurance or guarantees or extending existing ones. Extension of performance securities is aimed to help a travel services provider to successfully organise its operations, and the financial institution that provides support to it is provided with protection against risk. In this case, it will be evaluated how the provided guarantee improves conditions of performance security for the relevant travel services provider. For instance, the term of validity of an available performance security (if the service is provided by a financial institution) or suretyship insurance (if the service is provided by an insurance company) will be extended or their amount will be raised; it will also be evaluated whether the amount of the applicable deposit is abolished (reduced) for the travel services provider at the time of the amendment.
Travel services providers that wish to obtain a performance guarantee or suretyship insurance must provide an insurance company or financial institution with a SME status declaration and a valid travel services provider certificate and fill out a declaration of conformity and an application to provide the guarantee. They must also provide their financial statements to the Centre of Registers.
Head of INVEGA has noted that, in addition to the guarantees provided, starting from 15 July travel services providers may also apply for preferential loans for the tourism industry affected by COVID-19. Since the launch of this measure, travel services providers have more opportunities to settle accounts with tourists for cancelled trips: this measure may be availed of both by entrepreneurs and enterprises that lack only a share of funds required to settle accounts with tourists and by those that require the entire amount to fulfil their obligations.