Contingency
Insurers have been adjusting their underwriting approach in light of the impact losses have caused the London Market, mainly as a result of natural catastrophe (Nat Cat) exposure and adverse weather conditions. To assess the risk more accurately, brokers and clients need to submit detailed information to underwriters such as accurate budgets, event management plans, proposal forms.
Changes in policy terms and conditions
Some insurers in the London Market will not provide coverage for Nat Cat perils, such as windstorms. Climate change is increasingly affecting live events and the London Market is closely monitoring developments in this space.
Underwriting changes
Aviva entered the London Contingency Market in January 2024.
Notable claims
Claims are driven by events exposed to natural catastrophes. Furthermore, insurers have incurred losses from adverse weather conditions that have impacted live events, in particular music festivals.
Geographic/sector differences
Most of the demand for contingency risk protection comes from North America, both due to the size of the live event market as well as the exposure to natural catastrophes.
Outlook
Expected range in rate changes for the next 6 months for claims-free portfolios
Overall, premiums for live event cancellation coverage remain stable. However, rating for music festivals appears to be increasing depending on location, time of year, event management plans, experience in organising and staging such events, as well as deductibles. Any increase in rating will need to be reviewed and assessed on a case-by-case basis.
Expected capacity change in the next 6 months for claims-free portfolios
Capacity for the majority of market participants remains at the same level as 2023, but there are rumours that there may be a couple of new entrants to the Contingency Market during 2024.
Expected coverage change in the next 6 months for claims-free portfolios
Unchanged.
Insurers have been adjusting their underwriting approach in light of the impact losses have caused the London Market, mainly as a result of natural catastrophe exposure and adverse weather conditions.
Emerging risks
Cyber is a growing risk for all entertainment events, productions and shows. Event organisers are relying more heavily on technology in presenting their events or productions. Nat Cat perils, wildfires and/or adverse air quality are increasingly impacting the ability to host live events. Underwriters are actively monitoring these risks.
Renewal recommendations
Insurance buyers should prepare and provide as much transparent information about their event as possible to allow insurers to assess and competitively price the coverage they are providing. Clients should seek coverage and request the terms and conditions as early as possible.
For further information, please visit the Lockton Specialty page, or contact:
Andrew Thompson
Broker Accident, Health, Sports & Contingency
E: andy.thompson@lockton.com