Is insurance capacity returning to the live events market?

Is insurance capacity returning to the live events market? | Insurance Business Australia

Is insurance capacity returning to the live events market?

Solution Underwriting Agency has launched a new public liability insurance offering for live events. Glenn Eason (pictured), the agency’s national liability manager, said reduced local market capacity and the current surge in the number of events across Australia created an opportunity.

“From our point of view the events are really starting to kick off now and I think the market capacity has waned a little bit over the last couple of years,” said Eason, whose underwriting agency has offices in Melbourne and Sydney.

“So we thought it was a great time to put our new product on the market,” he said.

The reduced market capacity is a direct result of the COVID-19 pandemic. Australia’s live entertainment industry has suffered devastating financial impacts from COVID-19 induced cancellations. Live Performance Australia (LPA), the industry’s peak body, estimated that in 2020 more than $23 billion was lost because of pandemic related cancellations.

Read more: Calls for national insurance scheme for live events intensify

“It’s a market that has been adversely affected by the pandemic and there’s been a lot of cancellations of business events as a result of COVID,” said Eason.

He said insurers involved in the market were hard hit by pandemic related cancellations and as a result “some have decided not to be involved in it.”

“Whereas we’re the other side of the coin in that we haven’t been adversely affected and we’re looking to take advantage of the new events base and the fact that more events now are starting than they were this time last year,” said Eason.

According to the firm’s advertisement for their new product, the offering is “designed to provide cover for event organisers against any losses arising from their exposure to personal injury, financial loss and/or property damage claims.” The insurance is secured by underwriters at Lloyd’s.

“Typically, we’re looking at festivals, conferences, trade shows, sporting events, theatre productions, there’s a whole range of events that would fall within the parameters of our offering,” he said.

However, Eason said their event liability insurance does not include pandemic coverage.

“No, it doesn’t,” he said.

Nonetheless, he said there’s already strong interest from event organisers in Solution’s offering.

“We’ve been flooded with inquiries,” said Eason. “When we released it, on the back of an EDM [electronic direct mail] we sent out, we had something like 30 slips coming in,” he said.

As pandemic risks recede, and more events go ahead, demand for live events insurance is likely to rise. However, numerous live shows and festivals across Australia cancelled their January and February dates due to pandemic and / or lockdown concerns. Rod Stewart postponed his March and April Australia tour. Boy George moved his March Fantabulosa appearances in Sydney and Melbourne to March 2023.

After months of lobbying from the entertainment industry, Victoria’s government became the first in Australia to launch COVID-19 event insurance. The 12-month scheme, launched in December, offers cover for creative, sporting, business and community events with revenue or costs ranging from $20,000 to $10 million.

Angela Kelly, chief insurance officer for the Victorian Managed Insurance Authority (VMIA), said one month into the scheme, their event insurance had policies in place for more than 200 events.

Read more: Victoria – how many live events now have pandemic coverage?

Under Victoria’s COVID-19 event insurance, policies provide a 100% payout if cancellation is forced due to public health orders from either the Victorian or Commonwealth government. If health restrictions reduce event capacity, 50% of the declared value of the event is payable.

According to recent entertainment industry reports, some events cancelled in NSW have been able to go ahead in Victoria. The February So Frenchy So Chic Festival scheduled in Sydney was cancelled, but went ahead in Melbourne days earlier.

Respected insurance industry veteran Dallas Booth has called for Victoria’s COVID-19 event insurance to be seriously considered by other Australian states.

“Especially for some of these bigger events that cost a lot of money to stage. It’s a huge loss if they have to cancel at the last minute,” said Booth.

Eason didn’t rule out offering pandemic coverage for live events in the future.

“I think once maybe it gets a little bit more under control, we could possibly look to expand that - but at this point in time, given that it’s effectively a start-up, we weren’t looking to include the pandemic cover,” said Eason.