Firstly, our best wishes are with everyone as we continue to battle this global pandemic and a huge thank you to all of those who are working tirelessly to assist and overcome this challenging time.
Covid-19 has swept across the world in a flash and is having an obvious effect on public health, society and the economy as a whole. Here, we’re taking a look at the impact it’s having in the sporting and insurance worlds and how people and organisations are having to adapt.
Four weeks ago, what feels like a distant memory now, members of McClarrons Sport attended the Cheltenham Festival, which saw 250,000 people through its gates (admittedly down from 2019 but only by 5.5%). Today, we are locked in our homes with no live sport across the majority of the world. With our work and social lives, at McClarrons Sport, operating primarily around sport, we find ourselves in a strange place as we watch reruns of the Premier League past years and iconic Ryder Cup moments.
All major events for the foreseeable future have been scratched from the sporting calendar: Euro 2020, Tokyo Olympics 2020, Wimbledon, Golf Majors, Ascot and the football league, to name just a few. Events being cancelled or postponed has hit the insurance market heavily, with reported losses well over the £6.5bn mark… and that was before the decision to postpone the Olympics was made.
Covid-19 is a disease caused by novel Coronavirus – a Communicable Disease. This can be added on to any insurance policy but figures show under 15% of active policies had the Communicable Disease add on. However, many of the policies with the add on applied are related to the major events which are seeing claims – resulting in major claims for the Lloyds of London and company markets.
A prime example, Wimbledon was set to run from June 29th to July 12th but has been cancelled due to the Covid-19 pandemic; the first time it has been cancelled since World War 2. There are reports that Wimbledon have taken out insurance cover for the last 17 years costing $2m each year ($34m in total), and are now set to receive a $141m payout thanks to their insurance policy providing cover for the impact of Covid-19.
Below, you can see some of the potential maximum revenue losses being seen in relation to sports events:
Potential maximum revenue loss of the Premier League due to the Coronavirus (Covid-19) as of April 2020
– Matchday: EUR 180m
– Broadcasting: EUR 800m
– Commercial: EUR 300m
Potential loss of revenue for UEFA for postponing or cancelling Euro 2020 due to the Coronavirus (Covid-19) as of April 2020
– Postponement: EUR 300m
– Cancellation: EUR 400m
Insured cost of the Tokyo 2020 Olympics due to the Coronavirus (Covid-19) as of April 2020
– TV rights and sponsorship: $2,000m
– Hospitality: $600m
Covid-19 clearly has had a substantial effect on our industry, like it is having on every aspect of people’s home and work lives. The past three weeks it has been increasingly important to assist and communicate with our clients, finding the right solution for each of our many risks – seeing how we can adjust and make sure their insurance continues to work for them.
Ensuring our clients and insurers are well informed on the latest decisions being made by sporting bodies, and government, has been key to make sure all parties are in agreement and comfortable with the solutions we are proposing. We are lucky to work with flexible underwriters who have a pragmatic approach, helping us to assist our clients as we look ahead to the future.
Whilst we all know this time will pass and the sporting flood gates will open again eventually (can it come soon enough?!), we now focus on preparing for the future and innovating through this quieter period to help assist clients as effectively as possible into the future.
Stay safe. #StayHomeSaveLives
Author: Tom Landale, Associate Director – Accident, Health, Sports & Contingency