Hockey is a high-collision, high-impact sport. Insurance brokers specializing in providing coverage for hockey stars have to be at the top of their game to ensure they deliver match-winning policies that allow their clients to perform at full throttle.
“Professional athletes are very unique in that they earn nearly all of their lifetime income in the first third of their life,” says Chris Moynes, managing director for ONE Sports and Entertainment Group. “(They) generally earn high income in those years relative to other professions and then have a very long time horizon in which to draw upon their savings.”
Moynes – who has put together a book to help clients avoid the “land mines” faced by professional athletes – has seen the coverage change substantially in the past decade.
“With the contracts that are being signed by professional athletes these days, the numbers are astronomical,” he says.
“With those huge numbers comes huge risk so, from my standpoint, it has evolved greatly.”
Beyond the rink, Moynes cites examples where injury or medical conditions have affected coverage.
“The guys realize that disability insurance is a key component to the risk mitigation that we talk about,” he says.
“I know that Chris Lack, partner and head of Exceptional Risk Advisors’ sports and entertainment division, talks about the situation where Teppo Numminen was employed by the Buffalo Sabres and had a disability insurance policy, and thank goodness he did, because he had a heart ailment pop up in one of his physicals. If he didn’t have that policy in place, the last year of his contract would have been negated without any kind of remuneration.”
Changing attitudes
In the past, many insurance professionals noticed a reluctance among their athlete clients to purchase these vital policies; policies that have the potential to safeguard financial futures. But for Dan Beechey, the president/ owner of Sands Financial Inc, the coverage is an easier sell these days.
“Most players have it now, on a private basis,” he says. “They see the value in it, most definitely. Incomes are going up, so it is more of a concern.”
Beechey says something else that has changed is the language in the contracts, which is definitely a positive for the players.
“Part of what I do is to look at market quotes,” he says. “I usually place coverage through five or six syndicates; most of our contracts are Lloyd’s contracts. There may be subtle differences in the language, depending on which syndicate it is, and some small differences in rates.”
Building relationships
For brokers who want to become known as experts in this specialized niche coverage, starting out can be difficult, says Lack.
“It can be challenging, and everyone has to start somewhere; there is always going to be a beginning,” he says.
“You can start developing a relationship with the hockey players’ parents or with a financial advisor who has a player for a client – from there you can start to build your career.”
It is more about the connections and cultivating those relationships, says Lack, noting that you don’t have to start trolling junior hockey rinks handing out business cards to build your book.
“What typically happens is one player leads to another player, as you do a great job with that first client and he recommends you to everyone in the dressing room,” he says. “They are always willing to give advice on who their fellow teammates should be working with.
“The players end up policing themselves, making sure they vet people that they are dealing with – so if you do a good job for one of them, word of mouth travels pretty quickly.”
When starting out, the league will provide funding for players to buy insurance, which creates what Lack calls “good habits”, so players understand that they have a valuable skill set that requires insurance.
“It starts a process where they will buy insurance throughout their career,” says Lack. “We’re just one part of that service – providing insurance – that does lead to investment advice.
But insurance is what we focus on.”
Although the common perception of an athlete is one of strength and durability, a sports career is a delicate and risky occupation. In order to safeguard these unique, high net worth individuals, insurance professionals must possess the ability to underwrite and bind high-limit specialized disability policies.
No NHLer with a bright future can afford to leave “money on the table” due to a career-ending injury.
