As climate risk continues to heighten, the sports industry, one of the most popular forms of entertainment across the globe, inevitably takes the full brunt of extreme weather events. Aside from physical losses from adverse weather conditions such as damage to set up, arenas, and technical equipment, many sporting events also endure business interruption expenses ahead of the big day due to cancellation or postponement. This takes a severe financial toll on event organizers, especially when ticket sales plummet.
The future of the sports industry is already feeling the pressure, as half of the former Winter Olympic host cities may be unable to sponsor the Winter Games by 2050 due to a lack of snow and ice. The cancellation of the 2023 Formula 1 Emilia-Romagna Grand Prix due to the heavy floods is another clear example of heightened exposure. The global sports market is approximately worth $756 billion annually, yet its vulnerability to global issues like COVID-19 and the climate, means that at least $12 billion is wiped from sport’s collective balance sheet annually, according to an ESPN study.
Adverse weather-related business interruptions are often excluded from conventional insurance policies. As the climate and risk landscape continue to evolve, the sports and entertainment industries face an uphill battle with reduced windows for scheduling outdoor events, more restrictive terms and conditions, as well as increased premium pricing in the traditional market.
This is where Descartes’ parametric solution for event cancellation can step in, covering for weather induced damages, increased expenses, loss of revenue or profit. What’s more, Descartes’ event cancellation coverage can pay the extra costs incurred by the insured to prevent the postponement, cancellation, or interruption of an event for any unforeseen circumstances.
The bottom line is that anyone participating in a sporting event has a financial interest at stake, including ticket goers, team owners, venues, sponsors, caterers, event organizers, and merchandisers. Descartes’ parametric adverse weather or Nat Cat solutions ultimately offer fresh capacity, flexibility, and transparency to meet the tailored needs of the sports and entertainment industry.
Check out our risk brochure to discover how Descartes’ parametric event cancellation policy protects the sports & entertainment industry in the United States and around the world.
