Wimbledon tennis tournament organiser the All England Lawn Tennis Association “has shown it is one step ahead of most businesses” following reports it could be set to claim back almost half of its losses from cancelling the event through a $2 million (£1.6 million) pandemic insurance policy.
Ben Carey-Evans, insurance analyst at GlobalData, commented as the coronavirus (Covid-19) pandemic continues to shut down sporting events worldwide.
Wimbledon was scheduled to run from 29 June to July 12, but the All England Lawn Tennis Association was forced to cancel the world-famous tennis tournament following the outbreak of Covid-19 and subsequent lockdown in the UK.
According to Forbes, the All England Lawn Tennis Association will receive $141 million from a coronavirus pandemic insurance policy costing $34 million over the past 17 years.
Reacting to the report, Carey-Evans said: “Wimbledon has shown it is one step ahead of most businesses by having insurance in place for current events. It has been paying around £1.5 million per year in pandemic insurance since it took notice of the SARS outbreak in 2003. It has paid out roughly £25.5 million over the 17-year period, and it is set to recover around £114 million, making it a very sensible investment.”
Data from GlobalData’s SportCal team shows that Wimbledon earns around $160 million (£127 million) in media rights, $151 million (£120 million) in sponsorship and around $52 million (£41 million) in ticket sales annually.
The All England Lawn Tennis Association will save approximately $38 million (£31 million) on prize money, and more on staff wages, but “this still represents a significant loss of income, despite the sizeable insurance pay-out”, Carey-Evans said. “Insurance represents damage limitation for the competition, and it will find itself in a much stronger position than most other events in the world during this period.”
Carey-Evans continued: “Reputable sporting events, such as the Premier League and The Open (golf), have been cancelled or postponed, causing the organisers to lose a lot of their investment. This unprecedented disruption to events caused by Covid-19, and the significant pay-out to Wimbledon will surely see all event organizers around the world look to invest in this product in the future.”
“This could see pandemic insurance move from being a niche product to an essential one for sports and music organisers. Insurers will face challenges in pricing premiums due to a sharp rise in popularity and the significant level of risk attached to the product.”