They say better have it and not need it than need it and not have it – there’s perhaps no adage more fitting than this one when talking about insurance. More specifically, there’s one type of cover that policyholders could have benefitted from during the coronavirus crisis had it been given a second thought beforehand.
“With insurance, you’re looking to insure the unknown,” Stuart Hartley (pictured), underwriting manager at Auckland-based Lloyd’s coverholder EventCover, told Insurance Business. “You just don’t know what is around the corner.
“Communicable disease as an insured peril was always available. And, in all honesty, nobody really took it; no events really inquired about it; we never had any conversations with any brokers regarding it. And then the next minute, everybody wants it and it’s not available anymore.”
Now nearly two years into the COVID-19 pandemic, most events the world over remain in a state of limbo, of later relying on government support schemes amid restrictions and cancellations.
Hartley, whose specialist underwriting agency is exclusively focussed on contingency risks, noted: “There’s been no change in what’s been available, from an insurance perspective, since March 2020. Nothing’s really changed in that respect – there is just no commercial availability, globally, for cancellation due to COVID.
“Here we have the ETSP (Events Transition Support Payment) scheme in New Zealand, which has been greatly received by a portion of the events industry. And we’ve seen a number of events cancelled over the last couple of weeks since we’ve moved back into red, which most likely had to claim under that scheme. So, no doubt that’s been quite welcomed.”
Aside from the abovementioned programme, which requires claimants to meet several criteria to be eligible, there is also the $22.5 million Arts and Culture Event Support Scheme.
“From a personal perspective,” added Hartley, “obviously we’re not involved in [the ETSP] scheme or anything like that. It’s not insurance; it’s effectively a guarantee by the government to provide some support. It’s only available for certain criteria of events on a certain scale, mostly the summer festivals. So, there’s a huge proportion of the events industry which has just got no support.”
He continued: “We work very closely with the business events sector, and we were extremely close with that sector in respect of trying to reintroduce some level of cover for them.
“We’ve been actively trying to reintroduce a level of cover for COVID. For almost 18 months now we’ve been working on this. We’ve been very, very close on a number of occasions, but we’ve just not been able to get it over the line because we’re obviously still going through the pandemic. So, it’s still not unforeseen.”
The event insurance expert, whose credentials include years spent at broking giant Marsh in New Zealand and at insurer RSA in the UK, said it’s been “an interesting couple of years,” to put it lightly. With it being “a minefield out there,” Hartley can’t imagine a professional conference organiser having any confidence in being successful in running events at this point.
“It’s very difficult to plan for an event because the timeline to organise an event is not quick,” stressed the underwriting manager. “It’s very, very difficult to sink expenses into an event when there’s no certainty that that event is going to go ahead and when there’s no certainty that any of those costs will be recovered.”
Hartley has not lost all hope, though.
He told Insurance Business: “We’ve probably seen the tide has started to turn, and hopefully that then should start to see capacity come into the market. As I said, we’ve been very close. There are a few markets that we are speaking to currently who have interest, especially in New Zealand where we’ve seen quite small losses from communicable disease and less deaths and cases and so forth.
“There is interest in New Zealand – and there always has been interest in New Zealand – because, from the outside looking in, we have had quite a good run compared to others. But in saying that, there’s still no capacity available at the moment, especially coming out of Lloyd’s. But that will change. We’ll start to see capacity come into the market – soon, hopefully.”
