Page 29 - Insurance Times March 2022

Wimbledon generates revenue from sponsorships, postponed, causing the organizers to lose a lot of their
broadcasting rights, tickets, concessions and merchandise. investment," he said.
Though Wimbledon does not break down its revenue, but
estimates by experts indicate Wimbledon gets roughly "This unprecedented disruption to events caused by COVID-
USD160 million from broadcasting rights, USD 47 million 19, and the significant pay-out to Wimbledon will surely see
from ticket sales, USD 47 million from sponsorships and USD all event organizers around the world to invest in this
35 million from concessions and merchandise sales. product in the future, he added.

The 2020 Wimbledon Tournament as "This could see pandemic insurance move from being a niche
seen from the perspective of insurance product to an essential one for sports and music organizers,"
he noted. "Insurers will face challenges in pricing premiums
The 2020 Wimbledon Championships set to run from 29 June due to a sharp rise in popularity and the significant level of
to 12 July, 2020 were cancelled due to public health risk attached to the product.
concerns linked to the corona virus epidemic. This was the
first cancellation of the tournament since World War II. The The scenario will not be very different in respect
134th Championships were to instead be staged from 28 June
to 11 July, 2021. of the Olympics.
Insurers dodged a multi-billion-dollar loss on the Tokyo
The All England Lawn Tennis Association, which organizes Olympics. But as COVID-19 remains a global pandemic which
the Wimbledon tennis tournament, will recoup almost half has not yet fully receded, securing a financial safety net for
of its losses from cancelling the event thanks to the USD 2 the Paris and Los Angeles Games later this decade in 2024
million pandemic insurance it has reportedly taken out every and 2028 respectively will be much more difficult.
year for the last 17 years. Media reports indicate that the Communicable disease coverage is now a grim reality and
organizers are set to receive a USD 141 million payout the expenses may be prohibitive for the Olympic Games
thanks to their corona virus pandemic insurance policy. organizers.

The Wimbledon organizers have had the foresight to have The Olympics are usually insured years in advance. The 2028
paid out a total of USD 34 million for over the last 17 years Summer Games, set for Los Angeles, are currently in the
in insurance premium for their pandemic insurance following market. The Los Angeles City Council have finally published
the SARS outbreak in 2003. Ben Carey-Evans, insurance the elusive 'Games Agreement,' defining how the City will
analyst at GlobalData, the London-based platform that be hosting the Olympics.
provides data analytics and expert analysis about the
world's largest industries termed it "a very sensible Los Angeles intends to secure an insurance policy that
investment," as they will reap the benefits of this covers "natural disasters, communicable diseases, terrorism,
investment and minimise their financial damage. civil unrest, cyber-attacks, event cancellation, and coverage
for reduced ticket sales and other revenue losses should the
Media reports say that the AELTC has not confirmed the events become less appealing."
figures, but said that the club has "always sought to buy the
optimum insurance coverage available." Communicable diseases and cyber security are likely to be
two of the major concerns for the insurance industry.
The way ahead Providing covers for these risks will be quite challenging.
It would be pertinent at this juncture to assess the insurance
fall-out of the cancelled Wimbledon Championships and the Be that as it may, major-sports events now demand huge
postponed Tokyo Olympics. concentration of financial outlay on part of all the interested
parties and also generate earnings for them. It is big business
Pandemic insurance will now be in demand by other such for the organizers and insurers alike. But to do justice, the
organizers as well. Ben Carey-Evans, insurance analyst at risks taken on are also huge and the claims potential mind-
GlobalData said, Wimbledon is "one step ahead of most boggling, to be fair.
businesses by having insurance in place for current events."
"Reputable sporting events, such as the Premier League and References
The Open [golf tournament], have been cancelled or Various sources

The Insurance Times, March 2022 29