Insurers Face Highest Ever Event Cancellation
Insurance payouts from the cancellation of major events – such as the Tokyo Olympics or Wimbledon – and related issues could exceed $80 billion, an all-time high.
Insurance payouts linked to event cancellation alone are estimated to be over $6.3 billion, according to Tommy Elliot of Circles Group, a Hong Kong-based specialist in event cancellation insurance, in an «SCMP» report. This compares with revenue generated from policy sales of just $250-350 million annually.
And when factoring travel insurance, business interruption insurance, credit insurance and other insurance costs, the report noted that the total figure – $80 billion or more – could surpass that of the September 11 attack in 2001.
«It will be the biggest market loss ever,» Elliot said.
Olympics and Wimbledon
The ongoing coronavirus pandemic has acted as an unprecedented drag on insurers via payouts. Notable expenses related to major events included Wimbledon, which reportedly received $141 million from the cancellation of its tournaments, and the Olympics, which Jeffries estimates will cost insurers $2 billion from television rights, sponsorships and $600 million for hospitality.
Major insurers such as Swiss Re have been hit via $250 million exposure to the Tokyo games should a full cancellation occur. Swiss Re has a 15 percent global market share on event cancellation insurance.
