Premiums will soar as insurers face record payouts for cancelled, postponed events like Tokyo Olympics and Wimbledon, say industry watchers
- Postponement of Tokyo Olympic Games alone will cost insurers an estimated US$2 billion
- Insurers face potential payouts of about US$6.3 billion as major sports events and concerts are either scrapped or delayed by the pandemic
The postponement of the Tokyo Olympic Games and other major sports events because of the coronavirus crisis is not only a pain for fans but also a huge loss for insurance companies.
This will lead to a surge in the price of different types of insurance cover worldwide, including Hong Kong, in the coming years, according to industry watchers.
Waves of compensation claims were triggered after the Olympic Games and big tennis, football, rugby and other sports competitions as well as entertainment events were cancelled or rescheduled as a result of the Covid-19 pandemic.
While Hong Kong-based insurers do not have much direct exposure to most of these, the enormous payouts mean many global insurers will incur losses, and this will have a knock-on effect, increasing premiums worldwide, according to Eric Hui Kam-kwai, chairman of the Hong Kong Federation of Insurers.