Germany’s Allianz is one of the main insurers of the FIFA World Cup, but it missed a great opportunity to cash in on the national team’s departure from the World Cup.
Before the start of the tournament, retailers in Germany offered various promotions and prizes that customers could receive if the German national team retained the title. To cover potential payouts, they turned to Allianz for insurance. But the company refused them, as it highly appreciated the likelihood of the final victory of the national team. Because of this, Allianz lost revenue in the form of insurance premiums. “Our numbers were obviously wrong,” said Allianz top manager Peter Williams. “But I think before the start of the competition, everyone considered Germany the favorite.”
International insurers are actively working at the World Championship in Russia. Insurance company Beazley estimates the total amount of insurance coverage at $ 6-7 billion, while at the previous championship in Brazil in 2014 this figure was approximately $ 5 billion.
These policies cover everything from the risk of terrorist attacks to injury to players. According to Beazley, insurance premiums for injury to star players could be as high as $ 200 million. “The spectrum of risks is very wide,” says AEGIS Managing Agency spokesman Adrian Beebe, whose agency is part of the Lloyd’s of London insurance market and also provides insurance for the current championship.
Insurers are active at other major events, including concert tours, music festivals, exhibitions, business conferences and political conventions. But none of them can compete in scale with the World Cup. The tournament in Russia takes place over 31 days in 11 cities, and 32 teams will play 64 matches. “The World Cup is arguably one of the biggest insured events with teams from all over the world,” says Allianz’s Williams.
Meanwhile, Allianz has made a number of other World Cup-related bets. For example, retailers asked to insure them against the championship of the Polish national team, to which she agreed. In this case, the company was not mistaken – the Polish team had already left the tournament. Allianz also hopes to capitalize on insurance solutions associated with other teams. In addition, Allianz insures FIFA, various national teams, including Germany, stadiums and infrastructure in Russia, and provides medical and travel insurance to fans.
Another risk that Allianz and other insurers offered to cover was the cancellation of the championship or its postponement. Beazley estimates the total cost of such policies could reach $ 1.5 billion, including coverage of TV rights and sponsorship agreements.
In addition, manufacturers of merchandise, such as T-shirts with country symbols, purchase insurance. “Few people think about spending millions of dollars somewhere to make T-shirts that are then sold around the world,” and companies need to protect themselves from the risks associated with manufacturing and transporting goods, Williams says. All this provides an inflow of “billions of dollars in premiums” to the insurance market, he adds.
Translated by Alexey Nevelsky
.