Paris 2024: Allianz is the main insurer; security, cyber and climate risks are top reasons for concern

19 July 2024 — Daniela GHETU
Paris 2024: Allianz is the main insurer; security, cyber and climate risks are top reasons for concern

Around 15 million visitors are expected in Paris between 26 July - 11 August for the Olympic Games, featuring 10,500 athletes from over 200 nations. Billions more will watch the event on TV. German insurer Allianz is the main insurer, with additional coverage provided by many other re/insurers, while security, cyber and climate risks are top reasons for concern.

The Paris 2024 Olympic Games will be the largest sporting event ever organized in France. With ticket sales, TV rights, and sponsorship deals amounting to millions, the stakes are high. According to the IOC (International Olympic Committee), almost all of the EUR 4.4 billion cost is privately funded through these sources. A similar amount has been spent on upgrading venues and infrastructure, with the competition venues almost completed. Many venues will benefit local communities after the Games, providing housing and community sports centers.

That said, the Olympic and Paralympic Games Paris 2024 are expected to be among the highest value yet in terms of sums insured, reflecting the sheer size, commercial value, and the fact Paris is hosting, explains Jan PRECHTL, a Regional Head of Entertainment Insurance at Allianz Commercial. “Values associated with large sports events were already increasing before the Covid-19 pandemic,” says Prechtl. He explained that as audiences have become more global, insured sums have increased. After the Covid crisis, inflation added more pressure, raising costs further, evident in ticket prices, hotels, and travel costs. This drives up insured values for large sporting events, making insurance support essential for organizing many major international events.

The show must go on

Almost all stakeholders involved in events such as the Olympics are covered by insurance, from the sport’s organizing body, the International Olympic Committee (IOC), and the national organizing committees, down to national teams or individual athletes, as well as sponsors, broadcasters, hospitality firms, retailers, and suppliers. “Insurance now plays a critical role in major sporting events. From the traditional insurance covers, such as property and motor, through to various liability coverages like public liability, accident, and health, to directors and officers, and cyber insurance. To varying degrees, all these coverages are likely to be in place, providing valuable protection for these events, their organizers, participants, and spectators,” says Mark WHAYLING, Global Product Lead, Entertainment, Allianz Commercial in an article published on the insurers’ website.

Event cancellation, which covers the financial impact of canceling or postponing an event due to circumstances like inclement weather, security and terror threats, or public health concerns, is arguably the biggest and most difficult risk for the insurance market. At a significant international athletic event, the values covered by cancellation insurance can easily reach the hundreds of millions of euros.

Insurance also plays a crucial role behind the scenes, supporting the daily operations of major sporting events or safeguarding the sporting venues themselves, in addition to the "big ticket" coverages like event cancellation. For instance, Allianz France is one of the primary insurers of important infrastructure, including the media village, the nautical stadium at Vaires-sur-Marne, and the Velodrome de Saint-Quentin-en-Yvelines. It offers coverage of the Marathon pour tous as well, the Allianz website explains. Besides the insurance programs directly linked to the Olympic games operations and infrastructure, there are also numerous insurers providing travel and ticket cancellation insurance for spectators who intend to watch the Games in Paris, or insurance coverage for the athletes and their teams, as medical insurance to guard against illnesses or injuries that might arise during practice or competition or liability insurance to guard against lawsuits.

Regarding efforts directly related to taking on the specific risks of the Olympics, Allianz emphasized that, as the current official Worldwide Insurance Partner for the Olympic and Paralympic Games, it collaborates with the IOC to provide insurance solutions and services to the organizing committees for the Olympic Games, the National Olympic Committees and their Olympic teams and athletes. Allianz is involved in the Games at a “broad scale, being the leading insurer and coordinating the multiple underwriting programs across various Allianz Property & Casualty units from Allianz France to Allianz Commercial and Allianz Partners. However, the company stressed out, providing the required level of insurance coverage for such a big event requires the cooperation of many insurers and reinsurers.

Top risks

Given the current global geopolitical climate, security threats are the most serious threat to consider, especially given the history of terrorist attacks in France in the recent years. France intends to deploy approximately 45,000 police and security forces for the Olympics, with contingency plans to scale back or relocate the opening ceremony if necessary. Insurers have been asked to provide specialized coverage for terrorism-related incidents, property damage, business interruption, and liability, often complementing governmental programs. They also need to consider the risks of civil unrest or climate activists disrupting the event and provide coverage for related damages and claims.

The threat of cyber-attacks is real and present, considering the past experiences from other major sports events. Major international sporting events now rely heavily on digital technology for ticketing, merchandise, broadcasting, and overall organization, explained Rishi Baviskar, Global Head of Cyber Risk Consulting at Allianz Commercial. This dependency can create bottlenecks and concentrate risks. AI-based attacks could disrupt events through ticketing fraud, interference with live broadcasts, or manipulation of digital scoreboards. Even a few minutes' delay could interrupt broadcasters' advertising schedules. Therefore, insurance coverage for cyber risks, including data breaches, network disruptions, and ransomware attacks, is critical to protect event operations and infrastructure.

Finally, climate risks may be not ignored, as the recent experience of extreme heat, wildfires or particularly devastating storms have demonstrated that such event may occur at any time and can prevent the competition events from taking place, with extremely complex financial consequences.
 

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