“Much needed government intervention,” is how the British Insurance Brokers’ Association (BIBA) described the £750-plus million Live Events Reinsurance Scheme announced by Chancellor of the Exchequer Rishi Sunak.
In a statement sent to the AmehNews saying In partnership with insurance marketplace Lloyd’s, the scheme will see the UK government act as a reinsurer to support live events across the country that are open to the general public. Lloyd’s underwriters Arch, Beazley, Dale Underwriting Partners, Hiscox, and Munich Re are among those participating.
The scheme – which will cover costs incurred in case of cancellations due to events being legally unable to take place if lockdowns are reimposed – will run from next month until the end of September next year.
BIBA executive director Graeme Trudgill said the Chancellor’s confirmation that there will be a government-backed programme was “welcome news for our members and the entire insurance sector, the events sector, and the economy as a whole.”
Trudgill noted: “There has been a huge collaborative effort across the insurance industry on this difficult issue. BIBA, along with our specialist members, has been lobbying Government for an intervention, explaining that the challenges for insurers created by COVID-19 and its variants were devastating to this part of the economy and that a financial intervention would actually create a 900% return in economic activity.
“We engaged with the All-Party Parliamentary Group on Insurance on this issue to see what appetite there was to progress. We were able to provide the Department for Culture, Media & Sport (DCMS) detailed information on the operation of cancellation insurance and underwriting considerations to help them build an intervention and were pleased to discuss the details of a proposal with their team and with Her Majesty’s Treasury.”
For Lloyd’s Market Association (LMA) underwriting director Patrick Davison, the scheme’s launch brings to light the “significant strengths and willingness” of the Lloyd’s market to find innovative solutions. “Supported by the LMA, it is the culmination of a significant intellectual and financial investment by managing agents,” he stated.
According to the LMA, there were intensive discussions involving Lloyd’s contingency underwriters prior to the scheme’s unveiling.
Meanwhile, London & International Insurance Brokers Association chief executive Christopher Croft highlighted: “The insurance broking industry has been working with the government on this scheme for some time, and Tim Thornhill from [events specialist broker] Tysers has been tireless in his work to solve this problem.
“We are delighted that the entertainment and events industry now have a solution that will enable events to go ahead. It builds on the film restart scheme, which helps provide greater certainty for the cultural industries that are such a major part of the UK economy.”
Worth £500 million, the film and TV production restart scheme has supported 610 independent film and TV productions and over 50,000 screen sector jobs in the last 12 months. The government has also provided more than £1 billion in backing – including a £600 million survival package for spectator sports – to the sport and leisure sectors.
Commenting on the events insurance scheme, Thornhill said: “The constructive approach taken by HM Treasury and DCMS to include the insurance market is a smart, pragmatic approach and means the swiftest possible transfer back to the commercial insurance market once there is more certainty in the future, to take on the risks directly.”
Also welcoming the initiative is Guidewire Software chief innovation officer Paul Mang, who believes agile technology has an important role to play in helping the insurance industry understand and respond to the new risks in a post-COVID world.
“It’s good news that the UK government has stepped up,” declared Mang. “Their decision to reinsure for losses does highlight how providing insurance coverage for pandemic-related losses for large events will likely need a hybrid public/private solution.”
Referring to so-called “connected insurance,” the chief innovation officer added: “Although it is necessary to bring more data and new analytics to bear on complex risk problems like event cancellation, this isn’t sufficient on its own. As an industry, we must also enable the data to move efficiently throughout the insurance network if we want to deliver innovation and develop new value propositions.”
LMA chair Andrew Brooks offered insights as well, saying that the partnership with the government will further add to the “considerable” support the Lloyd’s market had given customers since the start of the coronavirus crisis.
“The tenacity, dedication, and technical expertise of Patrick Davison have been instrumental in making this possible, enabling the market to answer a need that is a crucial factor in enabling society to reopen,” said Brooks. “It is a great achievement for the market and facilitating initiatives such as this for the benefit of our members and customers goes to the heart of the LMA’s purpose.”
Lloyd’s CEO John Neal went on to assert that they have stood by Lloyd’s customers throughout the pandemic.
Neal stated: “We are pleased to strengthen those efforts by partnering with the UK government to deliver the Live Events Reinsurance Scheme. This unique and critical cover will enable live events to resume around the country with confidence as society begins to reopen and begin its recovery, and we are proud to be playing our part.”
