At last the sun is shining in UK, in the Southern part at least, but the scale of the flood and storm losses arising from the appalling weather is only just emerging. Last week the ABI revealed £500m of claims for the UK insurance industry in just June alone and RSA was rushed into an unscheduled trading statement to explain their numbers to analysts and media commentators. The cancellation of several summer events, the Suffolk and the Great Yorkshire Show being the most recent victims of the rain, has hit the rural economy hard, to the tune of £240m according to one source. The Badminton Horse Trials was abandoned and the Formula One at Silverstone came close to wash-out but of course the granddaddy of all sporting occasions, the 2012 Olympics is now only days away.
Whilst the rain clouds might still put the dampers on proceedings, the weather alone is not going to force an abandonment or curtailment of the greatest show on earth. Nevertheless, the G4S security failure is a reminder that there is still time for things to go horribly wrong. At some point late on Friday evening therefore when the Queen will surely declare the games open, there will be no greater cheer than that in the bierkellers of Bavaria. Our friends at Munich Re who lead the cancellation insurance programme for the Olympics have a good chunk of a truly staggering EUR 4 billion claim if the games are called off. That a sum of this magnitude is payable; equivalent to a seriously big earthquake or windstorm, but without any property damage or loss of life, is testament to the huge amounts of money wrapped up in sponsorship and broadcasting rights.
There are over forty commercial partner organisations to the 2012 Games arranged in tiers with those at the top table paying anything up to £40m for the privilege. Considering the amounts of capital the industry has put at stake, it is perhaps surprising that little interest has been shown in using the event to market this not insignificant contribution; no insurance company or broker is amongst the long list of official sponsors. As Aon is demonstrating, like AIG before them, with the shirt sponsorship of Manchester United, the bigger players in our industry are capable of spending very tidy amounts for global media coverage. Like many of us have experienced with ticket prices, the cost of getting involved in the Olympics is just too prohibitive.
All the more curious is the low visibility of insurance providers when one considers the close proximity of the Olympic Park to Lloyd’s and the centre of the global specialist insurance market. We may not be present around the venues but insurers are transforming its backdrop, the City of London skyline. As we all watch the new Aon Centre arise opposite Lloyd’s it all seems a far cry from their then CEO Denis Mahoney’s doomed attempt to decamp the broking giant to Canary Wharf six years ago. US insurer WR Berkley announced this week that it too is to build a 40 story tower that will also dwarf Lloyd’s. As the banks complete their retreat to the Docklands, the City is fast becoming an insurance dominated hub and for those of us that have worked through some of the tougher times in the market of the past, in this Olympic week, that is certainly something to cheer.