The cancellation of the Wimbledon tennis tournament, and the associated nine-figure insurance payout, is going to change the way the industry offers pandemic coverage, a Canadian commercial broker suggests.
A report by Britain-based GlobalData says the Wimbledon organizer paid for pandemic cancellation coverage and is set to receive a payout of £114 million (approximately CAN$199.5 million).
“It’s going to change the entire way of looking at insurance after this is all over,” said Darren Rodrigues, the new president of the Insurance Brokers of Toronto Region, in a recent interview.
COVID-19 was declared a pandemic this past March by the World Health Organization, resulting in postponement or cancellation of events involving large gatherings of people.
The Canadian Press reported earlier that the Wimbledon tennis tournament – originally scheduled to be held June 29 to July 12 near London, England – is cancelled for the first time since the Second World War. Instead, it will be held in the summer of 2021.
Insurers “may or may not” offer the same type of coverage the Wimbledon organizers got in the future, but if they do “it’s going to be at a very high premium,” Rodrigues said Tuesday in an interview about the impact of the COVID-19 pandemic on brokers.
Going forward, the Wimbledon organizers would not be able to continue getting the same coverage for the same price because “the math does not work,” predicts Rodrigues.
Global data reported earlier the tournament organizer had been paying about £1.5 million a year since 2003 for pandemic coverage.
“I always tell my clients, insurance companies are not a charitable organization – just like you, the business owner, want to make money. And an insurance company wants to make money,” said Rodrigues, who is director of commercial lines at BrokerLink’s office in Woodbridge, north of Toronto.
Wimbledon was first held in 1877 and has been contested every year since, with the exception 1915-18 and 1940-45, the Canadian Press reported.
Event cancellation policies normally exclude communicable disease, Ben Rossington, Toronto-based entertainment and sports account manager at Hub International, told Canadian Underwriter earlier.
Insurers were already increasing rates for cancellation insurance but that was independent of the current COVID-19 pandemic, said Rossington. “I would imagine that the majority of cancellation policies that were ever issued prior to COVID-19 did not factor this potential threat to be covered,” he told Canadian Underwriter at the time, commenting in general on events and not specifically on any particular event.
In addition to Wimbledon, other major events that were cancelled because of COVID-19 include the world figure skating championships originally scheduled March 16 through 22 in Montreal, the Juno awards, and the RIMS conference in the United States.