Global instability and the rising threat of violence are pushing premiums up for this year’s World Cup with estimates suggesting the current insured value of the event is already in excess of $10bn.
"The biggest concerns are terror risk, war risk, the event not happening or a match being moved from one stadium to another – this one is more likely,” James Davies, Integro's head of sporting events, contingency and risk management, told Reuters.
Ben Lockwood, a terrorism underwriter with AEGIS London, agreed that terror risk was among the most concerning of all exposures but said premiums against attacks were still less than 0.5 per cent of the overall insured sum.
“The perceived terrorism risk in Russia is considerably higher than Brazil,” he told Reuters. “I’d estimate this balances out at the Russia World Cup (premiums) being about 10 per cent higher than Brazil.”
Lockwood also revealed that AEGIS perceived the risk of terror as so high in certain areas that it was not underwriting cover for airports, railway stations or the underground network, which are all considered easier targets than the stadiums, which will have an incredibly high level of security.
Insurer Beazley estimated that the 12 stadiums would be insured for physical damage to a sum of around $1bn, with a further $250m to cover terrorism liability and another $100m for active-shooter policies.
The organisation also predicted that the hospitality industry is insured for $500m against the risk of event cancellation.
