“The terrorist attack on the Sri Lanka cricket team in Lahore [Pakistan] highlights the vulnerability of sporting events to terrorist disruption,” warned Dr. Gordon Woo, terrorism risk expert at Risk Management Solutions. “A characteristic of terrorist behavior is learning from success elsewhere.”
Woo pointed out that “with concern rising over copycat attacks on other major sporting events, insurance coverage for such events is liable to become increasingly expensive. With the London Olympics on the horizon in 2012, this may have implications for securing coverage.”
RMS notes that the “terrorism insurance market has softened considerably since 2003, when FIFA securitized the risk of the 2006 football World Cup being cancelled in the first transaction of its type, Golden Goal Finance Ltd., for which RMS carried out the terrorism risk analysis.”
Woo also indicated: “As prices harden for insuring international sporting events against terrorist disruption, we may see more interest in transferring the risk to the capital markets through innovative transactions.”
Source: Risk Management Solutions – www.rms.com
Topics Catastrophe
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