Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Insurance UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (March 20, 2020, 4:19 PM GMT) -- Global reinsurer Swiss Re said it would face a $250 million loss if this summer's Tokyo Olympics are canceled because of the coronavirus pandemic, as well as "mid-three-digit" exposures to other events being canceled this year.
The Switzerland-based insurance giant said in an investor call Thursday it had a 15% global market share of event cancellation cover, which could be claimed due to coronavirus-related cancellations.
Insurers face some of the biggest claims from event cancellation cover, as major sporting events and concerts are called off in the wake of the spreading virus.
"We assess all of these potential impacts to be entirely manageable at this point," said Swiss Re's group chief financial officer, John Dacey.
The International Olympic Committee has so far decided against canceling the 2020 Olympics, which are due to start July 24, but said it would review its position nearer the time.
"The IOC's decision will not be determined by financial interests, because thanks to its risk management policies and insurance it will in any case be able to continue its operations," the body said in a statement Tuesday.
According to its 2016 report, the IOC spent $468 million on the Rio Summer Olympics, including $12 million on insurance premiums.
Financial analyst company Jefferies said at the start of the month that it estimates the insured cost of the 2020 Olympics, including TV and sponsorship, to be as high as $2 billion.
Insurers will also likely face claims from the postponement of UEFA Euro 2020, a major soccer event held every four years that rivals the World Cup in scope.
According to an infographic by London insurer Beazley, a mega sporting event like the Brazil World Cup in 2014 could have been insured up to $1.25 billion for event cancellation.
Most event cancellation insurance policies do not cover losses from communicable diseases like the coronavirus, except where such coverage is sold as an add-on. Moreover, that coverage is often only triggered when the government stops the event from going ahead, rather than when the organizer decides to cancel or attendees drop out.
Edel Ryan, head of entertainment insurance at broker Marsh JLT, told Law360 earlier this month that the majority of new event cancellation insurance policies sold included specific exclusions over the coronavirus.
--Editing by Marygrace Murphy.
For a reprint of this article, please contact reprints@law360.com.
