Page 28 - Insurance Times March 2022

kept sporting enthusiasts enthralled world-wide through live
telecasts.

Held with the uncertainty of a world in the grip of a
pandemic, the Olympics were preceded by debates about
whether they should at all be held and would another
postponement be required?

Searches in the public domain revealed that the Tokyo
Olympics ran up a bill of USD 15.4 billion. However, some
estimates indicate that it may even be as much as USD 25
billion.

Olympic costs have been analysed in a study by the out around USD 800 million of protection for each Summer
University of Oxford, which found that all Games since 1960
Games, which covers most of the roughly USD 1 billion
have had cost overruns averaging 172%. Tokyo's cost overrun
investment it makes in each host city.
is estimated at 111% or 244% depending on which cost
figure is selected.
In addition, the local organising committee in Tokyo will
have taken out a further policy, estimated at around USD
These huge figures correspondingly lead to the subject of 650 million, while broadcasters are also insured for large
the quantum of insurance premium and the nature of sums.
coverage for the corresponding event cancellation insurance
cover which is inevitably required with such high monetary "TV networks, sponsors, professional sports teams,
stakes, in the offing, as it were.
entertainers and other organisations could all have event
cancellation policies protecting their interests in the
2020 Tokyo Olympics as seen from the Olympics," said Leigh Ann Rossi, Chief Operating Officer at
perspective of insurance Broker, NFP Sports and Entertainment Group.
Lloyd's of London insurers are among those active in the
event cancellation market along with international insurers, Thus the aggregated insurance premium paid out by
and global reinsurers such as Munich Re and Swiss Re. The different interests would be an impressive figure indeed,
Olympics are typically insured by Lloyd's of London firms such which no doubt represents a big business opportunity for
as Beazley and Tokio Marine Kiln. insurers.
To come to the dimension of claims, one estimate by Fitch
Munich Re has a USD 500 million exposure to the Tokyo indicates that the Tokyo Olympics which were held without
Olympics said one source who communicated with Reuters. spectators will possibly cost reinsurers up to USD 400 million
Munich Re declined to comment in this regard.
in pay-outs for ticket and hospitality refunds.
Swiss Re has a USD 250 million exposure, its Chief Financial
Be that as it may, insurers were fortunate to avoid a USD
Officer John Dacey reportedly told analysts last year.
2-3 billion loss were the Tokyo Olympics cancelled this year.
In the global event cancellation market this would have
German insurer Allianz has signed an eight-year insurance amounted to the largest ever single-event insurance loss in
agreement with the IOC (International Olympic Committee)
history.
covering Winter and Summer Games, including the Summer
Games in Paris in 2024 and Los Angeles Games in 2028.
The 2020 Wimbledon Tournament
Analysts at Jefferies have estimated the Tokyo Olympics was Wimbledon, run by the All England Lawn Tennis and Croquet
insured for around USD 2 billion, plus a further USD 600 Club (AELTC), has always had a sense of tradition. The
million for hospitality. Wimbledon Championship is one of the four major Grand
Slam tournaments in tennis and also one of the oldest and
The International Olympic Committee (IOC) normally takes the most prestigious tennis event in the world.

28 The Insurance Times, March 2022