Following the recent news that Wimbledon, a prestige UK tennis tournament, is set to receive over £100m from its pandemic insurance;
Ben Carey-Evans, Insurance Analyst at GlobalData, shares his insights on the events preparations for pandemics such as the coronavirus (COVID-19) outbreak:
“Wimbledon has shown it is one step ahead of most businesses by having insurance in place for current events. It has been paying around £1.5m per year in pandemic insurance since it took notice of the SARS outbreak in 2003. It has paid out roughly £25.5m over the 17-year period, and it is set to recover around £114m, making it a very sensible investment.
“Reputable sporting events, such as the Premier League and The Open (golf), have been cancelled or postponed, causing the organisers to lose a lot of their investment. This unprecedented disruption to events caused by COVID-19, and the significant pay-out to Wimbledon will surely see all event organizers around the world look to invest in this product in the future. This could see pandemic insurance move from being a niche product to an essential one for sports and music organizers. Insurers will face challenges in pricing premiums due to a sharp rise in popularity and the significant level of risk attached to the product.
“Data from GlobalData’s SportCal team, shows that Wimbledon earns around $160m in media rights, $151m in sponsorship and around $52m in ticket sales annually. It will save $38.7m on prize money, and more on staff wages, but this still represents a significant loss of income, despite the sizeable insurance pay-out. Insurance represents damage limitation for the competition, and it will find itself in a much stronger position than most other events in the world during this period.”