Insurers face 'mind-blowingly' large loss if Olympics canceled

Insurers thought 6-7 years ago they got a truckload of easy money when they were paid to insure the event... Normal public should have better things to care about than the insurer's troubles.

$2-3 billion is pocket change to these insurance companies. What's "mind blowing" is how much they have profited every year for the last 100 years.

Insurance companies resemble casinos in many ways. The house usually always wins, and they hate having to pay out! If you don't want to suffer losses, then don't underwrite any kind of activity, it is a simple as that.

From reading this article, it almost feels like those that try to collect on their policies are doing something bad or wrong!

Good. Big insurance companies, Brokers, the Corporate world in general, are vermin. But they can relax, and expect big bailouts from the Government.

What am I missing? When has profits ever been guaranteed for insurance companies? By the very definition of their business, they are taking a risk and usually profit from it.

Oh so it's all insured, every Olympics has had considerable insurance, so there should be no issue with cancelling.

2-3 billion is considerable but there is reinsurance so the exposure is likely shared among many insurer and they are more than capable of covering the claim.

"Insurers are facing a $2-3 billion loss if the Tokyo Olympics are cancelled this year, amounting to the largest ever claim in the global event cancellation market, brokers say."

I see. So the Insurers took a business risk and now they want their money no matter if the citizens of Japan and visitors are affected by COVID-19.

So, holding the Olympics in 2021 is all about money to these Insurers without any regard to the death toll.

You took a business risk. You need to buy Insurance. Don't dare place people in harms way for your loss.

Insurers are facing a $2-3 billion loss if the Tokyo Olympics are cancelled this year, amounting to the largest ever claim in the global event cancellation market, brokers say.

And the taxpayers cost $15 billion to stage the games.

Money can be replaced. Not human lives.

Reprinting? Haven’t they heard of the Internet yet?

No tax payer funded bailouts please

Wait a minute, these guys don't have a Force majeure clause? Wouldn't this apply? I mean, either way the tax payers are screwed but at least this can't be used as an excuse to continue with the games.

Go To Crowfunding if necessary.

Some mind conscious citizens might help those companies

Olympics should go ahead. Quarantine and test or immunise athletes, and limit spectators to 50% and locals only. Broadcast rights are what brings in the $$$.

When an insurer takes the risk they have decided in advance that they can afford the hit if it goes wrong.

They are big losses but by definition within their risk appetite and will have reserves to survive it.

Well insures need to take the good with the bad and they shouldn't insure something if they can't afford the payout. to bad so sad.

Japanese taxpayers have to cough up over 2.5 trillion yen for this?

"The Olympics will be a symbol of insurers' victory over the virus."

I believe the way the Lloyds grouping works is to share risk among members so that no single member takes an excessive risk. In extreme cases guarantors, who make some easy money most years, can be called on to help. I do not think the guarantors have ever been called on to pay up. No doubt someone will correct me if I am wrong.

Is it reasonable to assume that Japanese insurance companies could also suffer a loss, in which case it would be reasonable to assume that they support holding the Olympics. I would also assume insurance companies would be part an essential part of a poll of companies to see how many companies support the Olympics.

I wonder if the Japanese insurance companies have been generously donating to the LDP recently.

@didou

Wait a minute, these guys don't have a Force majeure clause? Wouldn't this apply? I mean, either way the tax payers are screwed but at least this can't be used as an excuse to continue with the games.

No they don't have a Force majeure clause because that is what they are insuring it against. and they are paying a high premium for it as well, Olympics have a good record with no cancellations since 1944 which was because of WWII

Sorry insurers; this is your business. Most of the time the insurance companies win but occasionally they lose and yes they will lose big.

You will just be among the numerous other businesses negatively impacted by the Covid pandemic (i.e. see article about ANA).

If they didn't hedge the risk then tough. They can go the same way as Lehman.

Insurers face 'mind-blowingly' large loss if Olympics canceled

Get over it, pay up, and forget it along with these hypocritical Olympics.

Tokyo 2020 was never about sport, or human endeavor, it was only about Japan, Japan, Japan, and money, money, money.

Awarding Japan the 2020 Olympics was just a huge mistake.

They finally have to pay out after collecting years of premiums. Tough sheetz.

Billions is probably large in the world of event management, but not that large in other industries. Governments routinely user reinsurers to cover their risks in the event of natural disasters etc, and you can bet that these policies have paid out more than USD$2-3 Billion in the past.

Insurance is a long term game, and there was always a going to be an Olympics (Summer or Winter) canceled at some time. Thay have ben cancelled 3 time previously (1916 Berlin, 1944 London and ironically the 1940 Games in Tokyo).

there will be no olympics in tokyo this year.

no olympics.

in tokyo.

this year.

wakarimasuka?

The money insurance companies make is obscene, just glad it not us tax payers having to cough up for another mess up!

Don’t be so sure that taxpayers won’t be left off the hook for significant compensation payable to these firm believers in ‘privatizing profit, socializing losses’.

I'll be sure to play a tiny violin for their loss.

Their single function they don't want to do?? Aw boo hoo

Insurance do not cover natural disasters. lives are more important. No Olympics.

No body will cry for the insurance companies.

Nice they getting some karma for their greed.

Pity the local citizens have to bare the brunt of failed decisions by those in charge.

Just imagine the “mind blowingly” loss of life if they don’t cancel.

My dad worked in insurance all his life from age 14, from office boy to department manager. He wasn't one for telling me how to live my life, but I remember one rare occasion. "You can live your life as you wish, son. But promise me one thing. Don't ever work for an insurance company."

MatejToday  11:28 am JST

there will be no olympics in tokyo this year.

no olympics.

in tokyo.

this year.

wakarimasuka?

Let's see about that later.

Articles like these are coming out now to justify holding some version of Olympics.

Wakarimasuka?

Usually, insurers are insured themselves by other bigger insurance companies in the background. In reality, that whole branch won’t suffer so much. In addition, all people at the end of the chain will pay it by their future insurance contracts. You may know that already from paying consumption taxes. So if you all in the future sign any new insurance for your house or car or whatever, those big losses eventually caused by no Olympics will become part of the price, little by little.

They are just crying false tears as they are almost not affected at all.

If there is so much uncertainty surrounding the Tokyo games, why not move it to 2022? If 2021 is a go, I would think they need to let everyone know soon.

What is more important? Personnel Wealth or Global Health?

$2 to $3 billion is chump change. It's walking around money. Insured losses from three big hurricanes in the US in 2017 amounted to $93 billion. Insurance losses from the 1994 M 6.7 Northridge Quake totaled over $15 billion in then year dollars (much higher value in 2021 dollars). Just one piddly earthquake. Canceling the Olympics won't bankrupt the insurance industry. Not even close.

If the Olympics goes ahead, Japan will potentially suffer its biggest loss of life since WWII. Is Suga prepared to be at the helm of such an event ?

There is probably some truth in that. Olympic events tend to be big money losers for their host nations, with the 1984 Olympics in Los Angeles being the exception that proves the rule. The Tokyo region and Japan as a whole might end up out of pocket more than the insurance companies claim they will lose if the Olympics are cancelled.