# Local Olympics organisers face uninsured loss from spectator ban – sources Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-12 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Tokyo Olympics Faces Unlikely Insurance Payout Amid Spectator Ban Meta Description: The organising committee for the Tokyo Olympics is unlikely to receive insurance compensation for lost ticket sales due to a ban on spectators, potentially URL: https://financedigest.com/local-olympics-organisers-face-uninsured-loss-from-spectator-ban-sourceshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-12t160957z2lynxmpeh6b0tjrtroptp4olympics-2020-spectators-insurance-1736838188116-compressed.jpg) By Carolyn Cohn and Noor Zainab Hussain LONDON (Reuters) – The local Tokyo Olympics organising [committee](https://www.financedigest.com/swiss-authorities-draw-flak-in-credit-suisse-probe-report-says.html) is unlikely to get much of an insurance pay-out due to lost [ticket](https://www.financedigest.com/uks-top-big-ticket-shopping-list-of-2017.html) sales from a ban on spectators, after using up much of its event cancellation policy on postponement costs last year, insurance sources say. The [Olympics](https://www.financedigest.com/olympic-rings-displayed-on-eiffel-tower-50-days-before-paris-2024-games.html) will take place without spectators in host city Tokyo, organisers said last week, as a resurgent coronavirus forced Japan to declare a state of emergency in the capital that will run throughout the Games. Some events outside Tokyo will have spectators, but ticket revenues of about $815 [million are set to dwindle to close](https://www.financedigest.com/optable-closes-20-million-series-a-financing-broadens-investor-syndicate-in-new-round.html "Optable Closes Million Series A Financing, Broadens Investor Syndicate in New Round") to zero. Organisers said last December that the entire [cost of holding the Games would be about $15.4 billion](https://www.financedigest.com/eu-electric-vehicles-risk-4-3-billion-euro-post-brexit-tariff-cost-auto-body.html "EU electric vehicles risk 4.3 billion euro post-Brexit tariff cost – auto body"). Ratings agency Fitch estimate the total [insured cost](https://www.financedigest.com/as-the-cost-of-living-bites-tackling-insurance-quote-manipulation-is-key.html "As the cost of living bites, tackling insurance quote manipulation is key") of the Olympics at around $2.5 billion. Analysts at Jefferies last year calculated the [total insured costs of the Games at $2 billion](https://www.financedigest.com/simalliance-members-report-shipments-of-4-9-billion-sims-in-2017-while-estimated-total-available-sim-market-in-2017-increases-2-75-to-5-6-billion-units.html "SIMalliance Members Report Shipments of 4.9 Billion SIMs in 2017, while Estimated Total Available SIM Market in 2017 Increases 2.75% to 5.6 Billion Units   "), including TV rights and sponsorship, plus a further $600 million for hospitality. While the International Olympic Committee is responsible for sponsorship and broadcasting rights of the Games, the Tokyo [organising committee is responsible for ticket sales](https://www.financedigest.com/most-sales-and-marketing-teams-struggle-to-activate-data-in-their-organisation-according-to-new-international-study.html "Most Sales and Marketing teams struggle to activate data in their organisation, according to new international study"). Industry sources estimate the Tokyo committee has taken out an event cancellation policy totalling $500-800 million, though they [say the full ticket prices](https://www.financedigest.com/uk-house-prices-stabilise-after-four-month-fall-halifax-says.html "UK house prices stabilise after four-month fall, Halifax says") would not have been insured. Policyholders can typically claim for postponement costs on such a policy, said Leigh Ann Rossi, [chief operating officer in the sports and entertainment group](https://www.financedigest.com/iris-software-group-names-matt-tuson-as-chief-revenue-officer.html "IRIS Software Group names Matt Tuson as Chief Revenue Officer") of broker NFP. But after the Games were postponed [last year](https://www.financedigest.com/over-50-of-businesses-increased-their-cyber-security-budget-last-year-amid-attacks.html "Over 50% of businesses increased their cyber security budget last year amid attacks"), much of the local organisers’ policy limit may have already been used up in a claim for costs such as the rebooking of hotels and sports venues, leaving little room for a pay-out now. Unless there’s any limit left, I think it likely this would be an uninsured loss,” said Duncan Fraser, [global practice](https://www.financedigest.com/gateley-appoints-new-director-to-launch-global-mobility-practice.html "Gateley appoints new director to launch Global Mobility practice") leader, sport and entertainment, at broker Howden. EVENT CANCELLATION POLICIES The Olympics are typically [insured by Lloyd’s of London firms](https://www.financedigest.com/aon-to-acquire-henderson-insurance-broking-group-leading-uk-insurance-broking-firm.html "Aon to acquire Henderson Insurance Broking Group, leading UK insurance broking firm") such as Beazley and Tokio Marine Kiln. Beazley said it did not comment on client-related matters. TMK did not immediately respond to a request for comment. Travel and hospitality groups, sponsors and the International Olympic Committee are also likely to [face losses due to the disruption](https://www.financedigest.com/uk-airports-face-christmas-disruption-as-border-staff-to-strike.html "UK airports face Christmas disruption as border staff to strike") from the spectator ban, and claims on their event cancellation policies, sources said. The IOC takes out around $800 million of protection for each Summer Games, which covers most of the roughly $1 billion [investment it makes in each host city](https://www.financedigest.com/investing-in-the-city-thats-investing-in-itself-welcome-to-the-liverpool-of-the-future.html "INVESTING IN THE CITY THAT’S INVESTING IN ITSELF – WELCOME TO THE LIVERPOOL OF THE FUTURE!  "). The IOC may have more scope for a claim than the Tokyo committee. It did not have a postponement clause in its policy, so was unable to [claim insurance](https://www.financedigest.com/how-to-streamline-claims-conversations-in-the-insurance-sector-and-transform-your-cx.html "How to Streamline Claims Conversations in the Insurance Sector and Transform Your CX") last year, a third broking source said. The IOC and Tokyo Organising Committee did not respond to requests for comment. Reinsurers, which insure the [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers"), are likely to face the bulk of any claims as “high-severity exposures are typically reinsured”, Fitch said. They may [face a bill of $300-400 million due](https://www.financedigest.com/smaller-smes-face-failure-due-to-cashflow-barriers.html "Smaller SMEs face failure due to cashflow barriers") to the spectator ban, mainly from lost hospitality and ticket sales, Fitch estimated. Reinsurer Munich Re has a $500 [million exposure](https://www.financedigest.com/frasers-hugo-boss-exposure-falls-to-691-million.html "Frasers’ Hugo Boss exposure falls to 1 million") to the Tokyo Olympics, one source previously told Reuters. It declined to comment on Monday. [Swiss Re reiterated on Monday that it has a $250 million](https://www.financedigest.com/swiss-insurance-company-helvetia-uses-squirro-to-deliver-better-search-results-to-its-five-million-customers.html "Swiss insurance company Helvetia uses Squirro to deliver better search results to its five million customers") exposure to the Olympics. (Reporting by Carolyn Cohn in London and Noor Zainab Hussain in Bengaluru; Additional reporting by Alexander Huebner in Munich, Paul Arnold in Zurich and Elaine Lies in Tokyo; Editing by Emelia Sithole-Matarise) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---