Terror Attacks Risk Increases Insurance Values of World Cup in Russia
Terror attacks and damages from hooligans are the main concern of the companies, associations and foundations participating in the world biggest event, FIFA World Cup in Russia.
The insurance values have overcome $10 billion an amount exceeding about 10% more compared to the previous event in Brazil.
Companies insuring their proprieties and business against terror attack risk and hooligans damage are Stadium owners, ticketing agents, catering companies and players that also include cancellation, kidnap, cyber-attacks and personal injury.
“The biggest concerns are terror risk, war risk, the event not happening or a match being moved from one stadium to another – this one is more likely,” said James Davies, insurance broker Integro’s head of sporting events, contingency & risk management.
Ben Lockwood is terrorism underwriter at Lloyd’s of London insurer AEGIS London, which has provided cover for the tournament’s stadiums along with other Lloyd’s underwriters such as Beazley.
“The perceived terrorism risk in Russia is considerably higher than Brazil,” he said.
“I’d estimate this balances out at the Russia World Cup (premiums) being about 10 percent higher than Brazil.”
The success of the Sochi Olympics and strong competition among insurers has kept the rise in premiums lower than it might have otherwise been, they said.
The twelve Russian stadiums are insured for physical damage to a sum of around $1 billion. A further $250 million is for terrorism liability and $100 million is for active shooter policies.
Demand for active shooter policies, which include attacks using vehicles or knives, has risen compared with Brazil, said Chris Parker, head of political violence, terrorism and kidnap and ransom underwriting at Beazley.
President Vladimir Putin’s government is set to deploy thousands of security personnel to protect the stadiums in a “ring of steel” so Lockwood said any attacks could focus on easier-to-reach targets.
“When you place your policy two or three years before, it’s a different risk profile than it is now. I think if you are looking at it now, there is a perceived increased risk,” Duncan Fraser, senior partner at broker JLT Sport Media and Entertainment said. “They’ll be paying far higher pricing in my mind.”
Ticketing agencies may have insured against a cyber breach and clubs will likely have bought cover in case of injury and loss of player income.
FIFA, the event organizer has paid $134 million for insurance for clubs whose players get injured.