As the “changing times, changing needs” adage goes, the coronavirus crisis has altered nearly all aspects of living and working – including the way in which insurance programmes are now structured. Here Marsh Australia’s Anthony Mahon (pictured) tells Insurance Business how entertainment & leisure coverage has changed post-pandemic.
“Prior to COVID-19, established companies within the entertainment industry were confident of what their year ahead looked like,” he said. “With the unpredictable risk of snap lockdowns, as we have seen recently with the Byron Bay Bluesfest, promoter confidence has understandably diminished.”
“We have restructured many of our clients’ programmes in order to adapt to the changing times, such as adjustable policies with pre-agreed rates or reduced levels of coverage that mirror changed risk profiles,” explained Mahon, pointing to increased flexibility that is poised to continue until there is a greater level of confidence.
For event cancellation insurance, meanwhile, the Marsh principal cited an upward pressure on premiums, as well as the absence of communicable disease write-backs and reduced capacity within the global contingency market.
It was highlighted that the quality of underwriting submissions is critical when approaching the market – that is, a lacklustre submission will yield unfavourable results. According to Mahon, you generally only get one chance when positioning a contingency risk within the small field of insurers available.
“Insurers are staring down the barrel of some pretty large losses in the event cancellation space,” he stated. “Dealing with specialists who understand event contingency risk will put you in the best position going forward.”
As for the leisure side of things, the hard insurance market is proving to be extremely challenging.
“For many businesses, leisure-related risks such as adventure activities, extreme sports, water-based activities, inflatables and trampolines, etc., the appetite in the market has been greatly reduced,” noted Mahon. “That’s been a real challenge, especially for small businesses.”
One way to go about it, in Mahon’s view, is via an association or industry body.
He asserted: “I believe that associations will become even more important to insurance outcomes as the market hardens. Associations provide ‘strength in numbers’ as brokers look to approach the market on a portfolio basis, rather than a single client, which can help leverage positive outcomes for all involved.
“I believe that many small businesses struggling to find adequate insurance, especially in the leisure space, will start to look towards associations as a means to band together and negotiate solutions.”
Meanwhile, with many states around the country opening up and relaxing COVID-19 restrictions, Mahon is already seeing a large upswing in enquiries from event promoters. One thing he’s paying close attention to, though, is insurer appetite.
“Insurers are looking at their portfolios a lot more closely and changing their appetite for certain risks,” he said. “The main challenge for the future is to ensure that we continue to source and provide the best solutions for our entertainment clients as the demand for cover increases.”
Mahon is nonetheless excited, telling Insurance Business: “I think we’ll see an explosion of more events coming back as the world opens up. While events and entertainment took a nosedive last year, I think people have become more grateful that we have live events again. I believe we will see live entertainment grow exponentially over the next few years.”
