Logo Losberger
Logo Losberger

Following a weekend of sporting success on the global stage for British venues Wimbledon, Lord’s and Silverstone, Howden’s Rob Barron, writing for Access’ sister title Conference & Meetings World, offers some thoughts on why the Rugby World Cup 2019 will be built on insurance…

 

The Rugby World Cup in Japan is being billed as the world’s third biggest global sporting event, but it isn’t only sporting excellence which will make it a success. As the likes of England, Ireland, Wales, Scotland and the All Blacks go head-to-head between 20 September and 2 November in 2019, the insurance industry will also play a huge part in making sure the tournament goes smoothly.

All eyes will be on how Japan copes with hosting the tournament, not least because Asia has never staged a rugby union World Cup before. After all, it’s a huge opportunity to grow the sport at an event which is topped only by the Olympics and the FIFA football World Cup in terms of global reach.

Insurance allows a big event to take place, enabling organisers, fans and sponsors to invest in its success.

For the event owners, Rugby World Cup Ltd, it is vital that all potential risks are covered and mitigated – whether that’s injuries to players, freak weather conditions or even postponement, cancellation or abandonment of fixtures.

In fact, insurance plays a huge part in allowing a tournament to even take place and enabling organisers, governing bodies, national unions, clubs, sponsors and fans to invest in its success.

As long ago as 2010, Lloyds of London estimated that the total insurance for FIFA’s 2010 World Cup in South Africa amounted to as much as £6.2bn (US$7.89bn) – £3.2bn for stadia and training venues, and £3bn for linked business opportunities. Those figures did not include insurance policies applying to individual players in case of illness or injury.

There’s little doubt that the RWC tournament in Japan, like South Africa back in 2010, will receive extra attention because of its geography and the potential size of such a lucrative market for sponsors.

More than 400,000 fans are expected to visit Japan to watch the matches and the TV audience is expected to be well in excess of the 120m who watched the last Rugby World Cup Final, in England in 2015.

There is big money at stake, too. Japan has invested hundreds of millions of pounds in infrastructure to make the event work for everybody – from stadia improvements to new roads.

In 2015, ticket sales alone topped £250m, while online interest is expected to balloon this time, attracting a new list of high-level sponsorship.

Profits from the event in the past have allowed World Rugby to invest £266m between 2016 and 2019 on a programme to grow the sport, including a successful programme to increase participation in Asia. Tournament director Alan Gilpin said: “Japan 2019 will be transformational for the sport in Asia, and our Impact Beyond 2019 legacy programme, run in partnership with the Japan Rugby Football Union and Asia Rugby, is well on course to smash the target of attracting and retaining one million new players to the sport via the Asia 1 Million project.”

With so much at stake, insurance is clearly an important ingredient for everyone involved. If you are involved in a large event on a global scale, you may wish to take note of some of the key event insurance considerations:

 

Cancellation and Non-Appearance

This is vital for organisers of any tournament or major event.

Organisers may well look for comprehensive cover for the cancellation, abandonment, postponement, interruption, curtailment or relocation of any insured event, due to a consequence beyond the control of the insured.

 

Some of the other risks covered could include:

• Damage or destruction of the venue

• Unavoidable travel delay

• National mourning/Enforced reduced attendance

• Terrorism

• Communicable disease

Other insurance considerations, not just for organisers but for participating teams and sponsors, might include:

 

Contractual Bonus and Sales Promotion

It is important to think beyond what might go wrong. A player or team doing well in a tournament can also be expensive.

Most sponsorship and endorsement contracts will incorporate performance-related bonus incentives and most international teams, like club sides, would also offer their playing staff a performance-related bonus to maximise efforts.

Contractual Bonus Insurance can protect a sponsor, brand, club, union franchise or event organiser for their contractually-assumed liability to award bonuses to individuals or teams for attaining defined levels of success or achievement.

 

Loss of attraction

This coverage is not typically covered by traditional terrorism coverage. Loss of attraction is tailored to suit the needs of the client, protect revenues in the event of terrorist activity within an agreed radius of the business of specific agreed locations.

The act of or threat of an act of terrorism can not only impact the defined area of the terrorist act or threat, but can also have a knock on effect to the wider economy. For example, a terrorist act at an airport would have an impact to the resorts the airport serves which could be miles away from the actual attack.

 

Injury and disability

Although clubs do not take part in the World Cup, the fact their players do is a significant risk. For instance, if England hero Owen Farrell is injured in Japan and misses nine months of the following season, his club side Saracens must continue to pay his wages and can be seriously out of pocket if not properly insured.

Injury is also an issue for national unions – to ensure their players are fully covered against the impact of injury suffered on international duty, including disability.

 

Adverse weather and natural disasters

The challenge of coping with natural disasters is a significant risk in this Rugby World Cup.

Japan is used to dealing with extreme weather but last year the strongest typhoon in 25 years hit the western part of the country, killing 11 people. A few days later, 41 people died during a powerful earthquake on the northern island of Hokkaido.

“It’s a real hot topic for us right now,” said tournament director Alan Gilpin, who says risk assessment has been vital.

“It’s a complex piece and something we would do for every tournament. But this one has a heightened sense of realism to it. We have to take it seriously.”

It’s worth remembering, too, that in 2011 an earthquake hit Christchurch in New Zealand, forcing eight games at that year’s Rugby World Cup to be moved to other cities. Many ticket holders had to be refunded – not to mention the money spent on switching venues and changing travel arrangements.