With high security risks and exposures in the hundreds of millions, the London insurance market will play a crucial role in insuring the 2018 FIFA World Cup, according to Lloyd’s insurer Beazley.

Taking place between June 14 and July 15 in Russia, this multi-billion dollar event poses some very significant security risks, and the cover for cyber-attacks, terrorism and acts of violence, along with kidnapping are appropriately high.

In terms of cyber risk, Beazley noted that ticketing companies and event organisers hold valuable financial and personal data. Communications networks could also be hit by a data breach, which could translate to a risk of lawsuit and a loss of revenue from advertisers and subscribers. The estimated sum insured for an individual ticketing agency is $200m+, and $100m+ for a global broadcaster.

Concerns over terrorism are also high, and there is roughly $250m estimated terrorism cover for the event, with a further $100m in active shooter cover.

Kidnap is also a significant risk for high profile attendees, including players, their families and team entourage. The estimated insured sum per team is $25m. With 32 teams, this totals at $800m in cover needed.

The players themselves also have up to $200m in exposure, with clubs purchasing personal accident, loss of play income, payroll protection, and asset/transfer value cover insurance.

With billions of dollars riding on the success of the tournament, event cancellation cover is estimated to be up $1.5bn, including TV rights, sponsorship, advertising and ticket refunds.

Hotels are also faced with huge losses should the event be cancelled, postponed or relocated – with up $100m in cover for this.

Beazley estimates and insured sum of $500m for event cancellation in the hospitality industry, which cover corporate hospitality, event companies and souvenir manufacturers.

The council’s spokesperson, Yaser Al-Maarek, urged insured individuals to become familiar with their insurance company’s policy. He also stressed how important it is for them to be aware about the intricacies of the cooperative health insurance system and know their rights.

Fuaad Hawasawi, a health insurance expert, told Arab News: “It’s natural that hospitals are being required to take action now as a service provider. Hospitals are now more in command as they are capable of treating the patient, performing surgeries if needed and after that, they’re required to inform the insurance company of the case within 24 hours. After that, the insurance company can pay the hospital bill and the insured should only pay a specific amount depending on his insurance card, 10 percent of the amount or so.”

He added: “There have been cases before the regulation was passed in which hospitals contacted insurance companies about costly surgeries or a cardiac catheterization case that the hospital deemed as an emergency, but were forced to stop when insurance companies stalled to inquire more and ensure that their policy covered the patient’s case.”

Notably, there are a few treatments exempt from the policy such as cosmetic procedures (except in cases with urgent physical injuries that are not dismissed by insurance policy); injuries caused by self-harm; dental implants or bridges, as well as braces (unless caused by accidents); diseases contracted due to the misuse of certain medications, stimulants and sedatives; and those resulting from use of alcohol and drugs.

As of this moment, you can count the number of cryptocurrency insurers – such as XL Catlin, Chubb, and Mitsui Sumitomo Insurance – on one hand. That’s about to change, however, as various other insurance companies have expressed interest in safeguarding digital currencies.

With Bitcoin and other cryptocurrencies recently exploding into the mainstream consciousness following an impressive run-up in the closing months of 2017, insurance companies are clamoring to lead the charge in insuring a largely uninsured market – and are willing to bet big on the unregulated market’s future growth.

This news comes in hot off the hack of Tokyo-based exchange Coincheck’s recent loss of around $534 million worth of cryptocurrency to hackers – which is hardly the first time criminals have made off with digital currencies.

In addition to digital theft, cryptocurrency investors are also subject to technical errors, fraudulent exchanges, and other dangers – and very little protection exists for those who find their holdings have unexpectedly disappeared.

UP TO THE CHALLENGE

Insuring the unregulated sea that is cryptocurrency is no easy feat, and provides a whole slew of new challenges to companies largely unfamiliar with the emerging technology.

According to Christopher Liu, head of the American International Group Inc’s North American cyber insurance practice for financial institutions, insuring cryptocurrency is still in the “exploratory phase” – and adapting an existing model is key. “It’s sort of akin to a digital armored car service,“ he told Reuters. ”If there is a problem – like an accident or a robbery – that’s going to be the accumulation of all these exposures.”

A seemingly endless supply of shady and fraudulent cryptocurrencies also provide problems for insurance companies looking to gain a foothold in the market, as do legitimate exchanges and wallets unintentionally underprepared for the sheer weight of the market.

Many insurance companies are therefore taking a piecemeal approach.

The Great American Insurance Group, for example, only protects Bitcoin-accepting businesses from employee theft, but doesn’t insure against hackers. Other companies will avoid insuring online wallets—commonly known as “hot wallets”—due to the increased risk of outside hackers.

Volatility in the cryptocurrency market provides even more concerns, as the price of Bitcoin and other alternative cryptocurrencies have already seen dramatic increases in very short periods of time—meaning an expensive policy signed one year ago would cover significantly less Bitcoin that it would have in December 2017.

Of course, with any revolutionary new industry comes new challenges, and only those insurance companies bold enough to offer innovative solutions will profit the most. “This whole space is maturing and growing,” Henry Sanderson of Safeonline LLP told Reuters. “If we don’t embrace it now, it’s a missed opportunity for insurers.”

Agricultural losses from weather events in developing nations totaled $96 billion in a decade through 2015, with Asia accounting for half the amount, according to the United Nations’ Food & Agriculture Organization. In addition to climate issues, sectors from forestry to aquaculture face risks from problems such as market volatility, diseases and conflicts, the FAO said in a report.

“This has become the ‘new normal,’ and the impact of climate change will further exacerbate these threats and challenges,” FAO Director-General Jose Graziano da Silva said in a statement.

Natural disasters have become more frequent and intense since the 1980s, presenting challenges for about 2.5 billion people who depend on agriculture, the FAO said. Small-scale farmers, fishermen and other communities around the world generate more than half of all agricultural production, according to the Rome-based organization.

Almost a quarter of all financial losses caused by natural disasters in the decade through 2015 were borne by the agricultural sector, the FAO study showed. About 4 percent of potential output is lost to disasters.

An average of 260 natural disasters occurred in developing countries each year from 2005 to 2016, according to the FAO. Economic losses from climate- and weather-related events have been growing, and while the impact for 2017 hasn’t been calculated yet, the most violent hurricane season on record should confirm the trend, it said.

“The rising incidence of weather extremes will have increasingly negative impacts on agriculture,” the FAO said. Disasters often have long-lasting consequences on agriculture, including harvest and livestock losses, outbreaks of disease and damaged infrastructure and irrigation systems.

source:   

https://www.insurancejournal.com/news/international/2018/03/19/483737.htm