Insurers Could Lose Billions If Coronavirus Leads to Cancellation of Olympics
Global insurers stand to lose billions of dollars if the coronavirus forces the cancellation of the Summer Olympics in Tokyo. Japanese Prime Minister Shinzo Abe's government has ordered numerous sporting events to be canceled as it tries to contain the epidemic, but it has pledged that the Olympics will go ahead as planned beginning July 24. Japan has invested about $12 billion in the event. However, International Olympic Committee member Dick Pound reportedly said a decision about whether the Olympics will be postponed, moved, or canceled would need to be made by May.
Adrian Thomas, a director at Aon, says, “If they have to cancel two to three weeks before the event start-date, they have spent everything they have to spend. If you have three months to go before the event start-date, they have an opportunity to save some event costs.” Munich Re board member Torsten Jeworrek said it was a provider of cancellation insurance for Tokyo, for an amount in the hundreds of millions of euros. According to a Beazley infographic, event cancellation insurance for the 2014 and 2018 soccer World Cups covered potential losses of $1.25 billion to $1.5 billion.