In December, SLE Worldwide Australia’s general manager, Peter Mckenzie (pictured above), described 2022 as a “rebirth of the entertainment industry.” However, he said it was still “a trying year” for the entertainment sector. There were still COVID-19 outbreaks and insurers were tightening capacity and applying rate increases.
When IB caught up with Mckenzie a week ago he described a similar set of insurance challenges.
“In general, I would say, carriers are still looking for rate increases on books of businesses, regardless of occupation because of inflation,” he said. “So entertainment doesn't escape that.”
However, he was much more upbeat about the entertainment industry at large.
“The business of entertainment in Australia is back to full throttle,100%,” he said. SLE Worldwide is one of the largest providers of insurance to the entertainment industry in Australia.
“Twelve months ago the industry was probably operating at 60% capacity and now we're back to a full 100% capacity,” Mckenzie said. “The reason you're seeing that now is that promoters and festival organizers have got more confidence in borders staying open and artists coming out and appearing.”
He pointed to the recent successful Australia and New Zealand tour by English pop icon Ed Sheeran. Seventy-eight-year-old veteran rock star Rod Stewart is also on tour.
“You've still got issues from an insurance point of view,” said Mckenzie. “Rod Stewart, the other day, cancelled an outdoor show because of health reasons.”
He said clients [show organizers] either have to provide full refunds or credit or reschedule. “In this instance they were able to reschedule which keeps the additional cost down,” Mckenzie said.
Apart from international artists, outdoor music festivals are also back to full swing.
“A classic example is Bluesfest up in Byron Bay,” he said. “This will be the first time it’s gone ahead in two years.”
Bluesfest is scheduled for the upcoming Easter long weekend. How does SLE Worldwide go about underwriting an outdoor festival of this kind? What risks do brokers need to look out for?
“For me, insuring something like an outdoor festival involves reviewing the event layout, its risk management protocols, traffic management plans and camping procedures to name a few,” Mckenzie said.
This is business as usual for the firm and its clients, he said, compared to several years when most issues were a result of COVID-19 outbreaks, lockdowns and government border closures forcing promoters to cancel shows.
“That was the client’s biggest issue and that's a big overhead cost,” he said.
Mckenzie said “nothing’s changed” in terms of the “strict underwriting criteria” his firm needs to see in a risk.
“From an underwriting point of view, it just means we're seeing the opportunities come through again which allows us to grow our books of business again,” he said.
For outdoor festivals, he said, the layout is key. This includes making sure there are sufficiently spaced barrier systems for staging and that the electrics and everything set-up around that is done safely.
“Then, if there's camping involved you need to see the rules of camping,” Mckenzie said. “So what patrons are allowed to do, like having fires or service of alcohol, because if patrons are allowed to BYO their own alcohol into a campsite area it adds a lot of variables into the risk.”
He said a lot of big festivals outsource their security operation and also the alcohol service.
“This is part of the risk management,” Mckenzie said.
In an earlier interview with IB, Paul Howard, who was then general manager for Arena Underwriting (he is currently with Avant Mutual), highlighted similar risk management issues for outdoor entertainment events.
“First, are there enough security and crowd control measures in place to deal with the clientele?” said Newcastle-based Howard. “What controls do they have in place to ensure aggregate numbers of the crowd aren’t going to one stage at the same time? Do they have barriers to prevent crowd crushing and a plan to control numbers going in and out?”
He also said adequate first-aid facilities should be in place and contracts should have behaviour stipulations.
“For example, it’s often laid down that bands shouldn’t encourage people to crowd surf or to surge to the front,” said Howard. “A condition we put on major festivals is to require signage next to the stages stating banned behaviour.”
He said that signage is a requirement at most venues.
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