Simonx | 19th June 2018 - 10 min read
Data Protection | Features | Events
This week I thought I’d depart from the usual blog about technology, GDPR and software to look at how the insurance industry is coping with something that’s close to most of our hearts at present – the FIFA World Cup 2018, hosted by Russia.
It’s tough to say who’s going to win this year’s World Cup, though we could hardly do any worse than last time. The first couple of games has seen a few upsets with Spain drawing with Portugal, Germany not being able to find the back of the net, and Brazil squaring it off at one all with Switzerland. Meanwhile, England has cracked on with a promising start with captain Harry Kane rescuing the nation with a second goal in the first minute of injury time.
While our boys are risking it all on the field the insurance industry is taking on a few of its own, albeit a bit more behind the scenes. But without insurers keeping things afloat we wouldn’t have large events like this that incite us to shout at the television and drown our sorrows when our teams make mistakes or lose at the local bars.
“Without insurance there would be no World Cup, no Olympics or little organized competitive sport at all,” says Michael Furtschegger, head of entertainment international at Allianz Global Corporate & Specialty (AGCS). “For few would take on the risk required to stage an event, particularly one the size of the World Cup.”
There are plenty of risks when tens upon thousands of people descend on one area. When people are contained in stadia they are vulnerable to terrorism, natural disasters, fire and injury or death from lack of security and containment of emotional or panicked crowds.
Or something as simple and dangerous as the infrastructure failing and causing injury or casualties can also occur. It’s not unheard of that event organisers, builders and those offering or providing transport to cut corners. Accidents also happen and all of these potential risks need to be insured.
Players, organisers, fans and the surrounding infrastructure all need protection. Here we list and unpack some of this year’s risks a bit further:
- Injuries for players are an ever present threat. Anything can happen on the field from dislocated shoulders, torn muscles to injuries from studs-up tackles, which could result in any player being struck out of the entire tournament and in extreme cases even end his career.
With an event of this scale, it’s no surprise that the insurance needs are also spectacular. For this World Cup, FIFA has earmarked $134 million alone for the Club Protection Programme. It’s effectively insurance for clubs whose players get injured, while on international duty at the games.
- Hurricanes, tornados, earthquakes and tsunamis are just some of the natural dangers that could put a stop to the games. With the risk that Mother Nature will get in the way of a good game contingency or catastrophe insurance is vital. The costs of cancellation due to postponement following a natural catastrophe, infrastructure or terror attack is great so both Russia and FIFA have taken out insurance that pays out if a game is abandoned or moved to another location. Payments are also made if the World Cup is cancelled. Allianz explains that the World Cup has yet to be disrupted but it’s not impossible for something to scupper events of this magnitude. The insurer points out that in 2011 an earthquake hit Christchurch in New Zealand, forced eight games of the Rugby World Cup to be shifted. Fans were also compensated. Ticket holders were given refunds or new tickets at other venues. Broadcasters, sponsors, travel firms, airlines and retailers all typically buy this type of insurance to cover their investment in the event. Lloyds of London estimates that the total insurance for the 2010 World Cup in South Africa stood at $9 billion – $4.8 billion for stadiums and training venues and $4.2 billion for linked business opportunities.
- Protection for the players comes on top of the other covers. Individual protection insurance for players and at club level is therefore a must, in spite of the fact that FIFA provides millions of dollars in cover. Such type of cover is often kept under wraps but it is rumoured that Lionel Messi’s legs have been insured for 750 million euros. The main difference between the World Cup and other insurable events, says Furtschegger, is the value of the teams. Ahead of the 2014 World Cup, Lloyds estimated the total collective insurable value of the competing teams at 7.7 billion euros. Furtschegger adds: “FIFA has an insurance program to cover injury to the players, payable to the national teams; the national teams themselves have insurance, such as liability and personal accident insurance for their players, while the players can have their own cover to protect their earnings.”
- Teams are typically ferried to the games on planes and fleets of buses. Fleet insurance to cover team vehicles is also necessary. This type of insurance offers cover for team vehicles in the event of breakdowns or accidents, for example. With so many players and teams being transported such cover plays a vital role.
- Bonus payments insurance is also offered as a staple for large events like the FIFA World Cup and this year’s event is no exception. This, says Allianz, is for national associations to cover contract bonus payments if an underrated team unexpectedly becomes world champion. Imagine if lower ranked teams where to surprise us all and make it to the top. While promises of payment may have been made, they may not be affordable.
- Terrorism is a risk too – more now than ever, particularly when it comes to cyber terrorism. When Russia was hosting the Winter Olympics in Sochi the Financial Times reported how people were unwittingly wading into a cyber battlefield and how Russia has some of the most feared cyber criminals in the world. Fast forward to 2018 and it is a contentious World Cup considering Russia’s policy toward Syria so anything is possible when it comes to cyber attacks. “Since the 1972 Munich Olympics, you always have the risk of terrorism and this is only marginally higher given the political dimensions of Russia’s involvement in Syria and in the disputed Caucasus region (home to one of the host cities, Rostov-on-Don),” points out Furtschegger.
- While terrorism is a big threat, hooliganism can also cause damage, loss of life and could stop events like World Cup games in their tracks. “Euro 2016 was marred by brawling of English and Russian fans,” says Furtschegger.
- It’s not only the players and the event organisers that could be at risk of losing money or their health. Spectators will also need individual health and travel insurance to ensure that in the event of a flight cancellation, bungled hotel booking or an accident that they are covered in full. Being stranded with no financial-back up in a foreign country, particularly in one that doesn’t speak English would be stressful for anyone. So it’s vital to advise travellers to keep insurance claims telephone numbers close at hand.
With the threat of violence from hooliganism and terrorism it’s important that fans also get good cover that would be acceptable in foreign hospitals. “While the Russian authorities have promised to tighten security, it cannot be discounted, so traveling fans are advised to have good international health and travel insurance.”
The World Cup isn’t over yet and no doubt more spectators will travel to Russia after purchasing tickets to the games or even to soak up the World Cup atmosphere and play tourist while Russia enjoys summer. Here brokers can still make a difference and advise on the correct products to take out to ensure that travellers are covered no matter what happens in Russia.
While the risk all appears to be concentrated in Russia itself and in the various cities hosting the games, it’s important for us back home to be vigilant too. The World Cup and the distractions that come with it is a perfect time for thieves to operate. They don’t even have to create a diversion because we will no doubt get so enthralled by supporting our teams (as we should).
But when we’re concentrating on Harry Kane, Mohamed Salah and Cristiano Ronaldo advancing on the goals there’s nothing to stop them from accessing our information. A quick distraction, neglecting our laptops or even a wrong strike of the finger as we cheer on our respective teams could leave our data and business assets vulnerable to cyber criminals and thieves.
So cheer on your teams from the office but do so at your own risk. Keep your security features on. Remember to log out from key accounts and stay vigilant at all times if you’re going to watch a game. It just takes a minute or even less for criminals to access everything your company may hold dear.
If you are in any doubt about your ability to keep everything secure and not get distracted by penalties and short corners, perhaps it’s best to rather enjoy the games with a pint at the pub! Just remember to invite your workmates – you don’t want to create enemies in the workplace too!
Simon spent over 10 years programming from behind a keyboard, before transitioning across to management. A keen adrenaline junkie, whether that involves going up the mountain or over the edge of the cliff. He learned his management skills not just in the I.T world but also running youth camps and conferences, helping teenagers find a footing in life. He also really likes pie.