Wimbledon's pandemic insurance coverage results in $141M payout
The renowned tennis tournament is set to receive around $141 million after paying for pandemic insurance coverage for nearly 20 years.
After 17 years of paying around $2 million in premium each year for pandemic insurance coverage, Wimbledon is recouping what it spent — and then some.
Last week, the All England Club (AELTC) and the Committee of Management of The Championships announced the cancellation of The Championships 2020, more commonly known as Wimbledon, for the first time since World War II. Just days after the announcement, SB Nation and Action Network reported that the renowned tennis tournament will collect 114 million pounds, approximately $141 million, from its insurance policy containing an infectious disease clause. The Wimbledon tournament was set to take place June 29-July 12, 2020; it will commence in June 2021.
The British Open, which also is canceled this year, reportedly also has pandemic coverage in place.
“Wimbledon has shown it is one step ahead of most businesses by having insurance in place for current events,” Ben Carey-Evans, insurance analyst at GlobalData, said in a statement. ”It has been paying around £1.5m per year in pandemic insurance since it took notice of the SARS outbreak in 2003. It has paid out roughly £25.5m over the 17-year period, and it is set to recover around £114m, making it a very sensible investment.”
For comparison, the officials from the French Open admitted that they could lose 230 million pounds if their tournament is not played this year, reported The Daily Mail. The French Open is scheduled to start in September.
“Reputable sporting events, such as the Premier League and The Open (golf), have been canceled or postponed, causing the organizers to lose a lot of their investment. This unprecedented disruption to events caused by COVID-19, and the significant payout to Wimbledon will surely see all event organizers around the world look to invest in this product in the future,” said Carey-Evans. “This could see pandemic insurance move from being a niche product to an essential one for sports and music organizers. Insurers will face challenges in pricing premiums due to a sharp rise in popularity and the significant level of risk attached to the product.”
Even before the COVID-19 pandemic, companies had limited options for pandemic insurance coverage. According to Marsh, which offers coverage under its PathogenRX product, companies’ bottom lines have historically been very exposed to pandemic and epidemic risks “because unlike natural catastrophes and other crises, pandemics and epidemics typically do not cause immediate physical damage — and they’re difficult to model because businesses have had no way to measure their potential economic loss.”
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