Coronavirus pandemic: Olympics postponement

Postponement softens big blow for insurers

LONDON • Delaying the Olympics is likely to cost insurers much less than cancelling the Tokyo Games altogether, with a chance that some of those involved may not have policies specifically covering a postponement, industry sources say.

Jefferies analysts have estimated the insured cost of the Games at US$2 billion (S$2.89 billion), including TV rights and sponsorship, plus US$600 million for hospitality.

The International Olympic Committee (IOC) takes out around US$800 million of protection for each Summer Games, which covers most of the roughly US$1 billion investment it makes in each host city.

After the postponement, the IOC, local organisers, sponsors and hospitality and travel providers are among organisations who may look to recoup some money from insurers for the delay. But this process is likely to be complicated.

"Cancellation insurance usually includes postponement as standard," said Tim Thornhill, sales director, entertainment and sport, at Lloyd's of London broker Tysers, who also said this might not always be the case.

Tokyo 2020 organising committee chief executive Toshiro Muto said on Tuesday it was not clear who would pay the extra costs arising from the postponement.

The cost of postponing the Games was not discussed by IOC chief Thomas Bach and Japanese Prime Minister Shinzo Abe on Tuesday. Japan has put up US$12 billion to host the 2020 Olympics.

Leigh Ann Rossi, chief operating officer of sports and entertainment at insurance broker BWD, said that for those organisations whose policies do cover the costs of postponement, "a claim would be less... than for a full cancellation".

Insurance industry sources also said the payouts would be smaller because companies would still be able to make money out of the Olympics when they finally take place.

Few sponsors have given details of their insurance.

Comcast Corp has insurance if the Olympics do not proceed. NBCUniversal, which is owned by Comcast, has sold more than US$1.25 billion in national advertising for the Games, a record for any broadcaster.

Insurance losses are likely to be borne by Lloyd's of London, industry sources say.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 26, 2020, with the headline 'Postponement softens big blow for insurers'. Print Edition | Subscribe