Insuring the Olympics
Few will have failed to observe that we are currently in the midst of that quadrennial festival, the Olympics. Yet with an estimated cost of £12bn, 500,000 foreign visitors attending and 11,000 of the world’s leading athletes competing, such an event couldn’t happen without insurance.
In case any reader fears they are embarking on an ill-informed sporting commentary, it is the insurance surrounding the month-long bonanza where TMK is involved.
The company is reinsuring the liability for the Rio Olympics. Two Brazilian based insurance companies, Tokio Marine Brazil and IRB won the right to provide the insurance programme. Then, as a recognised leader of underwriting high-profile sporting events, Tokio Marine Kiln was approached to lead the placement on both the primary and excess layers of the Lloyd’s reinsurance placement.
“The cover we are providing for Rio is quite a standard events liability coverage” says Sam Wylie, the Liability Underwriter who wrote the risk, “but being the Olympics, it’s a high profile account and we’re delighted to be underwriting such a prestigious event. It is also a great example of collaborating with other Tokio Marine companies.”
With essential insurances for the games in place, the spotlight can be on the main acts: the sportsmen and women taking part. Inevitably this isn’t risk free, as French gymnast, Samir Ait Said, found out when he broke his leg during a vault landing.
“Instead of taking out a policy specifically for the Olympics, most athletes will have an annual policy that covers any accidental death or injuries” says A&H Underwriter, Idie, Si. “What we’re seeing for the Olympics are risks that wouldn’t necessarily be covered under these policies such as chartered aircraft flight risks to and from, and war and terrorism exposures when they are in Rio. We’ve also seen a number of Zika related enquiries which is a concern for some athletes and attendees.”
A similar insurance occurs for the horses involved in the equine events as Equine Underwriter, Georgina Smart, explains, “a standard mortality policy, already in place, will insure the horses at the Olympics, but we would need to extend the territorial limits and adjust the premium to include Brazil.”
Another risk for insurers is having so many sportspeople competing simultaneously in the same city, “at large sporting events like the Olympics, aggregation of risk is a factor for A&H insurers”, says Idie, “we’ve seen a number of reinsurance enquiries from other insurers keen to lower their risk concentration at the Olympics.”
Everyone is competing for medals and these are another insurable item as US water polo player, Merrill Moses, will testify. Merrill is back in Rio competing again in the hope of replacing the silver medal he won at the 2008 Beijing Olympics which was subsequently stolen from his parents’ house in 2010.
“When we look to insure priceless items such as Olympic medals we would want to know about their usage and storage”, says Phillip Cahill, Head of Cargo, “I wouldn’t be happy insuring a medal that is paraded up and down the high street on a daily basis.”
“The story of each medal is unique and whilst we would primarily insure them for physical loss and damage, it’s very much a case by case basis for underwriting them”, adds Phillip.
But after the party has subsided and the media circus returned home, the question of the Olympic legacy has to be answered. In fact, the failure of cities to capitalise on the infrastructure created by an Olympics has been a nagging problem for host cities.
Reassuringly, from an insurance perspective this is less of an issue, “I wouldn’t be overly concerned with a host city not having a plan for a stadium or venue after an event, indeed there are greater risks when a building is being used on a regular basis”, says William Knowles, Head of EMEA LCP Property, “what is more important is that there are adequate security and processes to keep the building in good condition.”