A winning insurance attitude

01 October 2011 FAnews

The 2011 Rugby World Cup (RWC) has kicked of in New Zeeland and is still in full force. By the time you read this, we will be watching the semi-finals – and hopefully cheering the Springbok’s to victory... But we’re in the ‘easy’ seats!

The RWC is among the biggest international sporting events. Although South Africa is not hosting the 2011 tournament the local insurance industry will surely benefit from it. Tournaments of this size create gaps for innovation in the sports insurance space.

Interesting statistic

An international player at the height of their career, playing in one of the top European leagues, can be insured for up to £50 million. Assuming there are no pre-existing conditions, £40 million of this insurance is for “entire body” sports disability, including accidental death and permanent total disablement.

It’s not just their antics on the pitch that people are interested in. A player’s image can make or break their celebrity status, forcing clubs to insure reputations as much as “bodies”. A top player’s brand can be valued at around £10 million.

A different picture

A few years ago the International Rugby Board (IRB) introduced a regulation that requires players to have insurance cover when participating in international matches. For some, their existing personal accident policies may provide adequate cover, but for many, additional coverage is recommended.

Local sports fans will be in the dark about the “value” placed on South Africa’s top rugby players. This type of information is sensitive, for obvious reasons. But the Springbok team’s life insurance premiums must be quite hefty!

Michael Owen, Executive Director at Lockton, an independent international brokerage, reminds us that rugby is a punishing sport: “Many professionals don’t play the game much past their 30th birthday – and their bodies are typically shot to pieces by that time.” He places business in the Lloyd’s of London markets to cover rugby players for career-ending injury and disablement.

Try this for size

Rugby is one of the most loved sports in South Africa. It is enjoyed by many individuals – first at school, then at university or club level – and if lucky, at professional level. Rugby is also among the sports with the highest level of direct collision, with the result players are at high risk of injury from physical contact.

Dental injuries are among the most common suffered in rugby. Because mouth-guard use is not compulsory in South Africa, the incidents and costs associated with a ‘collision’ on the field, remain high. Medical schemes typically pay a limited amount toward dental care.

To cover this risk, Dental Information Systems, a South African-based insurance institute has initiated a plan to cover all levels of rugby. The plan, set to be endorsed by the SA Rugby Union and the SA Rugby Association, will soon provide dental insurance to the country’s national rugby team, amongst others.

The ‘fun’ part of insurance

Ugly Betty star America Ferrera’s smile has been insured for $10 million and Michael Flatley’s legs for $39 million, both through Lloyds of London. In the UK, the members of the Derbyshire Whiskers Club insured their beards against “fire and theft”, and a soccer fan insured against psychic trauma if England loses the World Cup!

Meanwhile we wonder what Bryan Habana’s legs, Morne Steyn’s kicking foot or Patrick Lambie’s features will be insured for – not to mention Pieter de Villiers’ moustache!

More innovation please

The World Cup provides insight into another area where insurance is critical. Rugby is a big part of the South African psyche – and it seems only a matter of time before local financial services providers realise there is no suitable product to provide cover for the school child, student or club rugby player.

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