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Insurers face losing billions if the coronavirus closes Tokyo Olympics

By Charlotte Ricca

Analysts claim the Games could be insured for up to $2.6bn

Insurance companies face paying out billions, if the coronavirus forces the cancellation of the Tokyo Olympics.

Prime Minister Shinzo Abe has already cancelled numerous sporting events in a bid to contain the epidemic. There are growing concerns that the Olympics will be postponed, cancelled or moved to different venues.

Dick Pound, a senior member of the International Olympic Committee (IOC), said this week the Games are more likely to be cancelled than postponed.

However, IOC President Thomas Bach has since told the media that they are “fully committed” to the Tokyo Olympics.

Organisers will no doubt be hoping to recoup some of their costs, which has reportedly cost Japan $25bn (£19.5m, €22.7). According to the FT.com, analysts at Jefferies believe the Olympics could be insured for up to $2.6bn.

The International Olympic Committee (IOC) has an insurance policy which includes “force majeure” events. However, this cover has not yet been tested, as other Olympic games have only been cancelled during world wars.

Local organisers, Olympics sponsors, merchandisers, hoteliers, car hire companies and travel firms also typically buy insurance.

Munich Re is one provider of cancellation insurance for Tokyo, which is reportedly worth hundreds of millions of euros. However, board member Torsten Jeworrek would not say whether the figure was more or less than its €250m exposure to the 2018 Winter Olympics, or if the policy covered coronavirus.

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