Tokyo Olympics: Insurance industry is taking risks with human lives

Tokyo Olympics: Insurance industry is taking risks with human lives | Insurance Business Asia

Tokyo Olympics: Insurance industry is taking risks with human lives

Japan remains adamant that the Tokyo 2021 Summer Olympics will kick off as planned on July 23.

As a total sports nut, Japan’s resoluteness in the face of all adversity would normally make me very happy. There’s nothing I like more than watching the best of the best battle it out on the global stage for the highest of sporting honours.

But this year, my excitement is shrouded by a COVID-shaped cloud.

I find myself agreeing with a vast chorus (including many in Japan) asking: How can the Summer Olympics go ahead when much of Japan remains under a state of emergency due to COVID-19? How can Japan proceed with confidence, knowing that the sports extravaganza could turn into a COVID-19 super-spreader event? And what will the cost of the Games be? Looking back, will it be calculated in Japanese Yen, or in the number of lives lost?

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Now, I completely support the use of sport, culture, music, and art to heal communities after catastrophic events. I also understand the need to kickstart economies by reopening businesses, encouraging travel, and getting back to “normal” as quickly as possible.

But I don’t think we’re in any position to rush. Much of the world – including developed countries like Canada, where I’m sat writing this editorial under a ‘Stay at Home’ order - are still in the grips of serious outbreaks. Surely, at this moment in time, the risk of running the Tokyo 2021 Summer Olympics is too great.

That’s where I question the insurance industry. As a stakeholder in huge events like the Olympics, is it not irresponsible for the industry to provide coverage and enable the Tokyo Summer Games to go ahead, with the knowledge that the pandemic is not yet under control in Japan or elsewhere around the world?

I find it interesting that insurers will pull out of coal projects because of the lasting damage that carbon-heavy industries will have on the future of our planet, and yet they’re still willing to support a mass event in the middle of a pandemic which is killing more and more people by the day. Looking at it from a social responsibility perspective, that just doesn’t add up to me.

Read more: Cancellation of Tokyo Olympics could blow up the insurance industry

Of course, there is a lot of money at stake. Reuters reported in January that the event cancellation insurance market could face a US$2 billion-US$3 billion loss if the Tokyo Summer Games are cancelled. This would be the largest ever loss for the global event cancellation market, which has already taken a huge hit from the COVID-19 pandemic.

But again, this isn’t just about money. As things currently stand, the gamble with the Tokyo Summer Games is with human lives. Is that a risk that anyone can put a price on?