Insurance industry worldwide will have to shell out $6 billion in claims on account of the cancelled sports events due to the novel Coronavirus pandemic. The bill might have gone up many fold, but a very limited number of events have got protection against the incurable virus.
The International Olympic Committee, the Tokyo 2020 Organising Committee and the major Olympics broadcasters like NBC in the US have secured comprehensive insurance protection against the cancellation of Tokyo 2020 Games, but many other major annual professional sports competitions like the Indian Premier League or most of the football leagues in Europe have not secured an extended protection against cancellations due to unforeseen pandemic or communicable diseases.
Claims for the Tokyo 2020 Games and Wimbledon alone may exceed $100 million, states a report by Sportsbusiness.com. The insurance industry may end up paying up to $6 bn in claims worldwide, according to specialist events insurer Circles Group.
Trade publication Insurance Times has reported that the Wimbledon organiser All England Lawn Tennis Club has been seeking additional protection against cancellation due to a pandemic or communicable disease for the last 17 years at an annual premium of £ 1.5 mn. The collective additional premium of £25.5m over the years now stands to earn the AELTC £114 mn in claims against the cancellation of The Championships this year.
In India, neither the Board of Control for Cricket in India nor the Indian Premier League franchisees or host broadcaster Star Sports have an additional protection against cancellation of the IPL due to the Coronavirus.
Traditionally the BCCI, franchisee and the broadcaster take insurance policies for the IPL around March, based on the realistic stakes. Since the Coronavirus had started spreading beyond China in January this year, insurance companies in India had stopped selling protection cover against the diseased in the first fortnight of the year. Thus, no IPL stakeholder was able to get additional insurance cover for the looming Coronavirus threat.