Home / Local / 8500 sport cancellations threaten $1.1 billion annual spend
15 June 2020
Sport event organisers are warning COVID-19 is leaving a $1.1 billion hole in Australia’s economy after the cancellation of 8500 mass participation events.
Cash flow at major event organisers has been wiped out as community confidence in attending large events was “shattered” by the coronavirus, jeopardising the revenue these events pump into the Australian economy each year, lobby group the Australian Mass Participation Sporting Event Alliance (AMPSEA) says.
AMPSEA represents 250 sport organisations and is being advised by Sportscover, an executive member on COVID-19 insurance issues in mass participation sports.
“The sports and leisure sector has been devasted by this,”Sportscover CEO Simon Allatson told insuranceNEWS.com.au. “I don’t think there’s a single customer of ours not affected. With 8500 cancellations, it’s an extraordinary figure.”
The impact on national sporting bodies “has been brutal,” he says.
The flow-on effect to suppliers, including such suppliers as merchandisers, signage firms and photographers is also significant, Mr Allatson says. As for insurance, the impact for Sportscover in April was “substantial”.
AMPSEA wants mass participation sport operators included in the next round of economic stimulus, helping preserve 11,000 jobs, driving regional economies and protecting $70 million raised each year for over 2500 charities.
Mr Allatson says up to a quarter of membership and participation could “disappear,” and some clubs won’t reopen. However, there have been enquiries for “risks that previously sat elsewhere”– a trend he attributes to Sportscover granting brokers optimum flexibility.
“We are starting to see a substantial increase in quote requests which augurs well for us,” Mr Allatson said. The company is looking at some risks outside its normal appetite and its dedication and commitment to assisting the industry “is being remembered”.
“Sportscover will come through this. We have 34 years of brand value tied on supporting the industry. We will see the benefit of Sportscover investing into the development of the sports industry and not just writing the policy and banking the premium.”
For example, Sportscover has insured Blind Sport Australia and has agreed to offer terms to “more unusual” risks such as a Dungeons and Dragons business, an axe-throwing leisure centre in Queensland, a pro-wrestling organisation in WA and an adventure park in Tasmania.
Industry sources report capacity has been restricted or removed, and SLE MD Brad French told insuranceNEWS.com.au the market is hardening and entering a “tough cycle for insurers”.
He describes “some of the feeling around the late 1990s, early 2000s” when Lloyd’s withdrew sizable capacity and Mr French was forced to choose accounts, and he felt pilloried for declining to insure the Scouts.
“We might see a bit of that. It will be tough for some markets.”
Mr French says SLE insures “every show you see” as well as Village Roadshow and theme and water parks, and he is optimistic that while revenue will take a hit in the near term it “will come back”.
“There will be a blip this year … a hole for 2020 but it will recover quickly,” Mr French said. “Sport, leisure and entertainment is such an important part of the Australian economy.
“Claims are not an issue. This distancing thing is a good thing for liability.”
Mr French says the pandemic has offered “a good reset for a lot of industries and how they operate their whole risk management regimes” and Australia’s competitive market will be the “first to soften again”.
SLE and Sportscover have both agreed to extend current policies and Mr French says he has strongly encouraged clients to not withdraw completely and be forced to return as a “new client” when things pick up.
“They’re going to lose members but they will come back. It’s sport.”