As the quadrennial Football (Soccer) World Cup readies for a month long series of matches in South Africa, insurance coverage has kept pace with one of the world’s biggest sporting events. It’s “insured to the tune of an estimated £6.2 billion [$8.95 billion] when it kicks off in less than a week” according to a bulletin on the Lloyd’s web site (www.lloyds.com).
The figures are roughly: Property – £3 billion [$4.33 billion]; Contingency – £3 billion [$4.33 billion]; Liability – £200 million [$288.6 million].
The only time the tournament has been cancelled, since it first began in 1930 [Uruguay was the first winner], has been due to war.
As the event has grown, so has its economic importance, and so have the risks. The organizers, FIFA, the media who broadcast and write about the event, the teams who play and their various sponsors, as well as “many other organizations with a financial interest take out insurance cover to protect against cancellation or other interruption,” Lloyd’s explained.
“While the focus is undoubtedly on the players, fans and footballers alike are keen to know that injuries and illness won’t jeopardize their chance for glory.”
The bulletin points out that a player at the height of their career and playing in one of the top leagues for their country “could be insured for £50 million [$72.21 million],” according to Peter Thompson, underwriter at Beazley. “Assuming there are no pre-existing conditions, £40 million [$57.75 million] of this insures their entire body for sports disability, including accidental death and permanent total disablement, 24 hours a day.”
As well as coverage for game related incidents, the increasing spotlight on the players has increased the demand for coverage of their “brand.” A player’s image can “make or break their celebrity status;” therefore the clubs “need to insure their reputation as much as their feet to generate lucrative merchandise sales.” Dan Trueman, underwriter at Kiln, estimates a footballer’s brand to be worth around £10 million [$14.437 million].
The stadiums have also been the subject of much scrutiny with major renovations having been carried out on five existing ones, and five new ones being built around South Africa to accommodate the 2.75 million ticket holders.
Brian Oxley, Insurance Manager for the Organizing Committee at FIFA, stated that the combined value for these stadiums and training venues amounts to £3.2 billion [$4.62 billion].
Lloyd’s turned to Chris Nash, active underwriter at Sportscover, for some additional input on the “vast range of potential coverage.” He noted: “Competitions, offers, prizes, sponsorship, broadcast rights; it’s impossible to know how many there are, but all companies with these financial implications need coverage. When you take this into account along with the number of broadcasters around the world airing the games, I’d probably estimate the whole thing at around £3 billion [$4.33 billion].”
Lloyd’s concluded: “So as millions of fans around the world tune in from 11 June, FIFA, broadcasters and advertisers, national associations, clubs and players can have assurance that insurance is there to help them watch and play the beautiful game.”
[IJ Ed. Note: The U.S. team plays England, one of the pretournament favorites, on Saturday, June 12].
Source: Lloyd’s of London