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MUMBAI: The fifth and final T20 cricket match between India and South Africa, which was abandoned because of rain, is likely to trigger claims of Rs 40-45 crore. In a sign of the maturing of event insurance business in India, companies are still willing to cover events for up to Rs 150 crore even as many global underwriters are retiring hurt.
“The international event insurance market was severely hit following the pandemic. It was not just sporting events like the Olympics or Wimbledon, there were thousands of events across the world that got cancelled. The number of underwriters in the London market has reduced by 50%,” said Arjun Sharma, practice leader (sports, events & entertainment) at Gallagher Insurance Brokers.
According to Sharma, while the Indian market has seen a couple of private companies withdrawing following claims, others have stepped in to provide capacity. “There have not been any major cancellations in India, with the last being the one-day international between India and South Africa in March 2020 — that was cancelled due to rain,” said Sharma.
Hitherto the biggest uncertainty has been the weather, but the pandemic has added a new dimension. Unfortunately, there is a blanket exclusion of pandemic risks, not just for Covid but for any future epidemic as well. Any cancellations on account of a lockdown are not covered. However, there is an ongoing discussion with international underwriters on covering future pandemics.
The cancellation of Sunday’s match would have triggered multiple claims. These include from the broadcaster Star India for the loss of advertising revenue for the advertisement slots that it could not run. Insurers estimate that the claims would be around Rs 30 crore. Claims from sponsors include Paytm, MPL, ACC Cements and Dream11 for loss of visibility against the overs that were not played. BCCI and Karnataka State Cricket Association also had a stake in this as they were event organisers. However, the state association is understood to have taken a ‘one ball bowled’ cover, which means that the insurer’s liability ends the moment a single ball is bowled.
Public sector insurers led by New India Assurance and National Insurance were understood to have been providers of some of the covers. Star India, which has the maximum stake, having paid for the broadcasting rights, has taken out a multi-event policy earlier, for which the premium is understood to be in the region of Rs 35 crore. Sunday’s match was the last series under that policy.
While Indian insurers are willing to underwrite events, this is subject to the venues being finalised. This means that most matches can be covered only a couple of months before the event. “Insurers are willing to provide cover close to the events when the match schedules and locations are available. The flip side is that the pricing or exclusions might be high if there are adverse weather forecasts,” said Sharma.