Over the years, while sports have been widely considered as a leisure activity, there has been an increasing trend of interest and inclination seen amongst young talent in the country to pursue a particular sport professionally. As a nation, historically, cricket has always been one of the favourite sports and very popular amongst all age groups.
As the IPL season has commenced with a lot of excitement and thrill amongst people, the financial security of the game for various stakeholders is equally important as the stakes are on an ever-increasing high. As one of the major contributing factors to this increase is towards the player fees, the maximum value of a single player being at almost ₹25 crore in this season, which is by far the highest in any given IPL season. This has surely led to the organisers and franchisees to avail adequate protection of their investments.
The Sports Insurance market landscape is constantly changing with the increasing financial stakes associated with the varied sports properties in the country. The market is seeing a steep increase in the values to the extent of almost 2.5 to 3 times more than the former values.
IPL value in terms of media rights itself has increased by almost 195% for 2023-2027 as compared to 2018-2022. This huge transition translates into higher values of insurance buying which also demands larger insurable capacities to be deployed from the insurance and reinsurance markets. The scale of IPL’s financial exposure this year is around ₹10,000 crore. IPL 2024 has experienced a higher premium cost particularly the player related insurances by 20% to 25% primarily because of unfavourable claims experience of last season. Event cancellation insurance premium have remained flat as the loss experience has been very favourable for the underwriters and IPL hasn’t experienced any large event losses in the recent years.
With different levels of adrenaline and excitement involved in various sports, there is always an element of “Risk” with varying degrees of “severity” and “frequency” exposures. For instance, a cricket game being washed out due to unexpected rains or wet-outfields, football matches cancelled due to death of a ruler, technical disturbances on TV or streaming platforms, riot, strike, civil commotion situation, act/threat of terrorism, injuries/illnesses to the athletes which result in emergency medical expenses out of pocket (to name a few) have a real financial impact on the game. These risks can be addressed and managed by way of Sports or Contingency Insurance. Below are some of the significant insurance coverage provided in the sports field:
- Event cancellation insurance: It protects the financial loss to a stakeholder engaged in the event, arising out of any disruption due to contingencies. The impact is not just quantitative but also qualitative in terms of the nature of the risk like changing weather patterns, newer risks like communicable disease, civil disturbances across regions.
- Athlete related insurance: Athlete related solutions are more to protect the professional athlete from injuries or illnesses, while playing the sport towards their loss of remuneration, emergency medical/accidental expenses incurred.
- General insurance protects third party liability, physical damage to third party property pertaining to the event.
As for the “Sports Insurance Risk Carriers” are concerned, Indian public sector insurers and a few private insurers actively underwrite the contingency class of business. One could say this with immense pride that Indian insurers have demonstrated the truest mantra of “Made in India” and have stepped up their game in extending substantial capacities and expertise for Sports Insurance to ensure that the end user is adequately equipped to deal with a contingent situation.
Associate Director – Sports
Alliance Insurance Brokers
Also, one should not forget the stellar support provided by domestic reinsurers and overseas reinsurers i.e Lloyds of London particularly who have demonstrated continuity and consistency in providing capacities and imparting technical expertise to underwrite huge and complex risks, such as IPL, ICC World Cup to name a few. With the growing involvement of large investments across, it is vital that sports organisations protect their assets with adequate insurance that is designed to cover various aspects of the event like amateur and professional athletes, clubs, groups and associations. Sports insurance is as important as any other insurance category, looking at the fast-growing sports industry in the country.
