A recent report into the entertainment insurance industry from GII research revealed the rapid growth of the market in recent years, highlighting that it will grow from $3.50 billion in 2023 to $3.88 billion in 2024 at a compound annual growth rate (CAGR) of 11.0%. The market is projected to grow rapidly in the next few years, with estimates anticipating that it will hit $5.93 billion in 2028 at a compound annual growth rate (CAGR) of 11.2%.
In an interview with Insurance Business, earlier this year, Chubb UK’s technology and media practice leader Alex Smith zeroed in on the opportunity in the sector, citing Chubb’s market research which estimates that there is about £800 million of gross written premium within the media sector in the UK alone.
Given the rapid growth of the market, it’s no surprise that the media and entertainment sector is increasingly on the radar for insurers and their distribution partners. But how has the sector changed over the years – and what are some of the key trends dominating discussions in the market today?
Offering his insights, Tim Thornhill (pictured left), managing director at Tysers Live - the globally focused division at Tysers that provides insurance solutions for entertainment, media & sport – noted that in the seven years that he has been working in the sector, there have been several changes of note.
“The market for event cancellation has hardened considerably because of changeable weather, arguably to do with climate change,” he said. “Factors that have a short to medium term impact to our clients, such as communicable disease outbreaks and strikes and the actor and writer strikes, have had a significant impact not just for our clients but on the broking and underwriting landscape.”
There has also been a significant impact from Brexit, Thornhill said, and how transactions now must be processed between the UK and the EEA given the Freedom of Services provision being removed. This has not only impacted insurance but the operations and company structures of media and entertainment insurance clients.
Identifying some of the top trends he’s seeing sweep the market today, Michael Brunero (pictured right), head of tech, media & intellectual property, CFC, highlighted that, in terms of the media landscape, discussion around the role of artificial intelligence continues to dominate. “How does its use affect content creators and what recourse do they, or even should they have, when it is used to train generative models?” he asked.
“The application of fair use to AI will be heavily scrutinised and litigation surrounding this space will continue – but it may generate more questions than answers. There is also going to be an expanding grey area when it comes to insurance and AI where IP ownership is unclear and how claims will be handled in these cases. With some artists and content creators welcoming AI and others criticising it as the death of creativity, discussion on AI and its usage is not going away any time soon.”
Brunero added that, when it comes to streaming services, true crime and biopic documentaries continue to dominate with audiences captivated by the out of ordinary happening to ordinary people. “This continued popularity does pose a risk for creators and producers,” he said, “with defamation actions and breach of privacy associated with internet sleuths taking it upon themselves to locate and identify individuals concerned – look no further than Baby Reindeer. Editorial review has never been more crucial with streaming services and the internet allowing the widespread dissemination of content on unprecedented scale.”
There’s a broad variety of factors behind the surging interest in the sectors, among them an uptick in live events and concerts and the growing understanding of the role unprecedented natural disasters can have on events. The expansion of streaming services, ongoing COVID pressures and an evolving emphasis on sustainability in products are other considerations, shaping where the market goes next.
Outlining what’s dominating his discussions today, Thornhill pointed to the evolving cyber market and how this is being dealt with by underwriters and MGAs. Another subject for conversation is around restrictions in cover for some of the recent large claims that the market has seen, he said, including communicable disease, war and terrorism. “There has been significant consolidation in many of the entertainment and media subsectors where the larger operators have been buying up small independents and other parts of the supply chain.”
Identifying some of the key drivers of what’s happening in the market, Brunero noted that streaming is a massive driver as consumer behaviour has changed. Demand for on-demand content is at an all-time high, he said. The ability to use AI to generate content quickly and cheaply at the expense of human jobs is no doubt a key consideration for providers of streaming services.
“The rise of direct-to-stream content is stripping writers and talent of income they would have earned from box office performance in the past, causing them to strike and halt productions globally,” he said. “The same issue applies to online streaming music and artists’ earnings, which now rely more heavily on tour income than album sales.”
