By Paul Nicholson
November 25 – A new insurance product launched today is providing Europe’s top clubs with the opportunity to insure their players against illness or injury that could affect the club’s performance on the field and hence its financial performance off it. A club could protect up to £100 million of revenue with the cover.
The product – called MAXI – has been created by Avoca Elite Sports (AES) and specialist insurer Hiscox.
The insurance provided by MAXI covers teams against a fall in a player’s agreed transfer value but also compensates the club for potential lost revenues (through weaker team performance on the pitch eg failure to qualify for European competition) caused by that player’s absence from the team.
Clubs’ agreed squad transfer values are covered, regardless of players’ age and medical history.
Until now there has been no insurance product available that covers clubs against loss of revenue from loss of their key players through injury. The combined value of the squads of the top 20 European football clubs is estimated to be over £5 billion, but, AES and Hiscox reckon that very little of this amount is protected.
Existing insurance protection compensates clubs only for the wage costs of a long-term injured player or for an insured value if a player is forced to retire through injury (an unusual occurence at the top level).
“Football clubs are among the very few businesses whose key assets, on which they rely for their success, are exposed to harm on a weekly basis,” says Guillaume Bonnissent, Head of Alternative Distribution Division at Hiscox. “… Until now clubs haven’t had the ability to comprehensively protect these expensive assets in the same way that other businesses can protect their balance sheets.”
Clubs can insure their playing squads for up to £450 million (obviously depending on the agreed values of the players), but the payouts are capped at £100 million per season. To get the cover, it is likely to cost a club about £2 million in premium.
Hiscox leads the risk protection provided by MAXI, with additional backing from several of the world’s biggest insurers, including AXA, Munich Re and Swiss Re.
Read Matt Scott’s column at http://www.insideworldfootball.com/matt-scott/13674-matt-scott-big-injuries-can-mean-big-money-lost-call-your-broker
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