Disaster insuranceInsuring against Olympic cancelation
Starting on 27 July, the 2012 Olympic Games in London will see more than 10,000 athletes from nearly 200 different nations compete in 302 disciplines; nine million spectators are expected at the competition venues, while between three and four billion people will follow the spectacle on television; if the Games were called off as a result of terrorist act or another disaster, Munich Re would provide cover of around 350 million euros through several policies
After Beijing, Munich Re is once again the leading cancellation risk partner for the Summer Olympics in London. The spectrum of risks at major international sporting events is largely similar. At the same time, the areas of focus vary depending on the venue, so tailored solutions and professional risk management are required.
Munich re notes that following the European Football Championship (to be jointly hosted by Poland and Ukraine, beginning this Friday), a truly global sporting event awaits the company: the 2012 Summer Olympic Games in London. Starting on 27 July, more than 10,000 athletes from nearly 200 different nations will compete in 302 disciplines. Nine million spectators are expected at the competition venues, while between three and four billion people will follow the spectacle on television.
The sale of television rights, sponsorship money, income from ticket sales and souvenirs will all help finance the spectacle to a large degree. Should problems occur in the course of the event that lead to postponements, cancellation of certain events, or even to the Games being called off, the organizers would face large claims for damages that they would almost certainly be unable to bear alone.
Munich Re says it will again be one of the leading risk partners in London — as it is at most sporting events that attract worldwide interest. The company says that until the Olympic flame is extinguished, Munich Re will be covering a significant share of the claims that could arise in the event of the abandonment, interruption, delay, or relocation of the Games — with the help of individually tailored cancellation-of-events insurance cover.
Andrew Duxbury, London underwriting manager at Munich Re, told the Telegraph: “The revenue exposures between the World Cup in Africa and the London Olympics are similar, so I would expect the overall cancellation exposure to be a similar amount – about $5 billion.”
“Munich Re carries a substantial portion of this risk”, Duxbury explains. “If the Games were called off, Munich Re would provide cover of around €350 million through several policies. Guaranteeing this amount of cover requires not just financial strength, but also the necessary expertise to allow the risk to be assessed and managed in the best possible way.”
Knowing what is important
There are many possible reasons for disruptions to the Games. The spectrum of risks is similar no matter where the event is held. Still, certain country-specific characteristics need to be taken into account
