Sports
A softening insurance market
The insurance market for sports is currently competitive, with a limited number of insurers often competing for the same business via different brokers. Coupled with the impact of additional capacity from new entrants this is creating a softer underwriting environment than in other areas of the Accident & Health (A&H) market
Changes in policy terms and conditions
The automatic inclusion clause (automatically includes insurers when they are contracted) has been in place for some time now and insurers are increasing limits where appropriate. Medical underwriting is a key factor in the sports business, and lead underwriters need to have these capabilities.
Underwriting changes
RedRiff has started underwriting A&H risks and another new A&H entrant is expected to join within the next six months. Sports business is within RedRiff’s risk appetite and is also expected to be an area of focus for the other new entrant. At least one of the two new entrants will likely have lead underwriting capabilities, but this will depend on the composition of the teams. Meanwhile, QBE Re has built a new team to underwrite A&H risks.
Notable claims
Claims in sports activities are inevitable, but temporary disablement losses are more frequent than permanent total disablement losses. The size of the losses will vary significantly depending on the type of sport involved and the importance of the individual player.
Geographic/sector differences
Insurance buyers can regionally expect different market conditions as this depends on insurers’ specific underwriting approaches, their terms and conditions/pricing, and if they operate in the open market or as a coverholder.
New solutions
The market has introduced mental health insurance extensions as demand for such protection is increasing. Insurers are also developing products focussing on the specific protection needs of women’s games in the UK.
Outlook
Expected range in rate changes for the next 6 months for claims-free portfolios
Rates will vary depending on the sport activity, but we expect prices to trend downwards due to the new insurance capacity available in the market and the fact that there is strong competition for business among brokers and markets. Large clients are more often considering to re-market their risks.
Expected capacity change in the next 6 months for claims-free portfolios
The London Market is a major hub for sports insurance and additional syndicates are now underwriting these risks at Lloyd’s of London.
Expected coverage change in the next 6 months for claims-free portfolios
The professional sports market is well established, with a handful of market leaders. Mental health extensions may become more broadly used over the next 6 months.
New entrants are competing for business whilst incumbents are eager to increase their market share.
Emerging risks
Scientific research is increasingly showing considerable differences in the concussion risk and injuries between men and women. In addition to higher rates of concussion among females, female athletes are reporting a higher number of symptoms and more severe symptoms after brain injury than males.
Renewal recommendations
The currently amenable insurance market conditions offer an opportunity to review the required coverage and any changes in medical history to make sure that the protection suits its purpose. We also recommend using a facility instead of requesting a quote on the open market. The former tends to provide more favourable terms, with secured capacity and minimum premium requirements being less of a concern.
For further information, please visit the Lockton Specialty page, or contact:
Francesca Ross
Broker
E. francesca.ross@lockton.com