M Saraswathy Moneycontrol News
The Indian Premier League (IPL), the professional Twenty20 cricket league in India that will be played between April 7, 2018-May 27, 2018 has seen a mega risk insurance cover of almost Rs 2,500 crore across categories. Sources said the size of the cover for the broadcast has risen to Rs 1,500 crore compared to Rs 1,300 crore last year, while on the other hand the premiums have seen a jump of 3.5 to 4 times on an average. For players, a cover of almost Rs 40 crore per team has been taken.
The cover includes Rs 1,500 crore for broadcasters for complete IPL including event cancellation and ticket cancellation. New India Assurance has been the largest player in this space writing about 75 percent of the market policies.
Sources said premiums have been on the rise across the different policies because this has been a bleeding portfolio and insurers have become prudent in underwriting sports policies.
The event cancellation insurance with Rs 1,500 crore cover also includes match delays. Apart from that, industry sources said that the players’ loss of fee cover is also taken by the Board of Control for Cricket in India (BCCI) and the sum assured here is 50 percent of the player fees. This would add up to Rs 35 crore to Rs 40 crore per team.
So, overall the cover size would be roughly around Rs 2500 crore for the entire event spanning over a month.
“The insurers in India are becoming prudent in underwriting sports policies especially for IPL as this has been a bleeding portfolio since inception. So, the premiums have jumped compared to Rs 10 crore of last year,” said an official close to the development. The loss ratios are 150-200 percent here, meaning for every Rs 100 being collected as premium, Rs 150-200 is paid out as claims.
The key stakeholders here are BCCI, Star India who is the broadcaster as well as the eight franchisees apart from the sponsors.
Sources told Moneycontrol ,the loss of player fees is the most sought after cover this year since player injuries have been a common factor during this season. Last year, R Ashwin and Murali Vijay were ruled out of entire IPL due to injuries suffered in the previous series playing for India team.
When it comes to the latest demand of covers, the products on offer include loss of sponsorship cover for central sponsors covering 60 IPL games total for risks of weather, leading to cancellation/curtailment of matches. Similarly, there is also a loss of sponsorship cover for team sponsors covering home/away games of franchisees.
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