Are insurers ready for a World Cup here?

As football reaches a fever pitch in Brazil, Canadian soccer fans are crossing their fingers that a FIFA World Cup may become a reality in this country in 2026 – or maybe sooner. But what would that mean for insurers here?

Risk Management News

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As football reaches a fever pitch in Brazil, Canadian soccer fans are crossing their fingers that a FIFA World Cup may become a reality in this country in 2026 – or maybe even sooner. But what would that mean for insurers here?

The Canadian Soccer Association (CSA) announced plans to bid for the 2026 World Cup, and the governing world football body FIFA has already stated that it is seriously considering taking the 2022 World Cup away from host country Qatar and relocating it to shared venues in the United States and Canada.

Having played a role insuring previous Olympic Games in Canada and in next year’s Pan Am Games in Toronto, Mark Woodall – the president and CEO of Special Risk Insurance Managers – admits that it is a Herculean task.

“To have the right to be the liability and accident providers for the Pan Am Games,” Woodall told Insurance Business whose company won the bid to insure the 2015 Games, “is a coup for our organization. But the amount of work to be done between now and then will be phenomenal.”

One of the keys to successfully insuring an international event, says Woodall, is to ensure that the resources are user-friendly – in every language – and to ensure that the inevitable incidents and accidents are dealt with smoothly.

“The key thing is with the Games, that if you have a negative experience that is associated with insurance, it can detract significantly from the Games itself,” says Woodall. “When you have the amount of people that you will have at these venues, you are going to have incidents – people slip and fall and be injured. You are unfortunately going to have things fall on people, you are going to have some claims, there’s no question about it.

“The key thing is not only selling the right policy, but making sure you have the right claims process in place to immediate deal with that, so it doesn’t become a distraction to the games.”

An example of this is the incident that was contained was just prior to the Vancouver Winter Olympics, when Georgian luger Nodar Kumaritashvili died during a training run. (continued.)
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“Without that being handled in the manner in which it was, it could have had a significantly negative impact on the Games itself,” says Woodall. “But the Olympic committee, and the insurance company, handled it very well.”

The United States was the runner-up in its bid for the 2022 World Cup, narrowly missing the chance to put on the soccer tournament it previously hosted in 1994, in nine U.S. cities. But since Qatar was awarded the tournament over the United States, reports have emerged of some $5 million in bribes showered on FIFA officials by the oil-rich Mideast country.

It is those allegations of corruption that could swing a decision by FIFA to award the 2026 World Cup to Canada.

But hosting isn’t cheap. The bill for this year’s World Cup in Brazil has skyrocketed to an estimated $11.3 billion. And insurance for the games has been pegged at upwards of $2 billion – primarily for cancellation insurance.

Andrew Duxbury, an underwriting manager for special risks with Munich Re who has handled event cancellation insurance for the Olympic Games and the World Cup in the past, said each city faced different risks in handling major events.

Duxbury says total event cancellation insurance coverage for this year's World Cup “will be about $2 billion,” which would cover the cost of ticket refunds and hotel cancellations and losses at television stations if matches were called off.

New stadiums and renovations accounted for much of the cost to host in Brazil, as FIFA requires at least eight 40,000-plus seat venues and one stadium with a capacity to hold 80,000 for the final.

Canada’s largest venue, Commonwealth Stadium in Edmonton, Alta., holds 56,302, followed by Montreal’s Olympic Stadium (56,040), Toronto’s Rogers Centre (53,506) and BC Place in Vancouver (52,465).

New Mosaic Stadium in Regina, Sask., is the only other venue that meets the minimum standard at 40,000. (continued.)
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The CSA isn’t concerned by the size requirements or the need for new construction, as many of the existing and planned Canadian Football League stadiums are expandable.

“I believe we have enough there to put a successful bid together in the stadia that are currently available,” Peter Montopoli, general secretary of the Association., told Canadian Business, “and maybe one more that would meet the highest needs of FIFA.”

And there’s the small matter of the level of competition a Canadian team would be facing.

The men’s national soccer team currently sits between Bahrain and Niger in the international rankings; but the CSA sees that as the precise point to hosting the games here, as it would provide a boost to the sport’s national profile.

Canada will play host to the 2015 Women’s World Cup as well as the U-20 Women’s World Cup later this year, and successes with those events could pave the way for a shot at FIFA’s biggest prize.

 

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