MUMBAI: Specialized insurance policies provided by insurance firms to companies involved in the IPL 2018, have seen an increase in loss ratios 80 to 90 per cent last year to 150 to 200 per cent this year. According to a report in Business Standard, franchises and the BCCI have started sending insurance claims on account of injured players with less than three weeks left for the tournament to finish.
The insurance coverage this season amounts to Rs 23 billion, which is Rs. 5 billion more than 2017, according to industry estimates. But the premium rates for the various policies, such as event cancellation, player accident and medical costs, loss of player fees, has shot up by 3.5 to 4 times.
Pranav Shah, Director of Alliance Insurance Brokers says that claims of 6-7 injured players have been received by them so far. This companyprovides insurance to the BCCI and franchises. “These are specialised policies, so there are many factors that go into underwriting these policies such as years of experience, the category of player and the kind of injuries the player had in the past, if any,” added Shah. “Historically, the loss ratio was on the higher side, but the policy structure has changed over the years. The insured value per match has been increasing over the years,” Sanjay Datta, chief of underwriting, claims and reinsurance, ICICI Lombard General Insurance said to Business
Standard. ICICI Lombard is the lead insurer for Star India, the main broadcaster of the event.
The event cancellation premium rate which Star will receive has gone up from 0.25 per cent to 1 per cent, with the sum insured being Rs 15 billion for the entire season. The claims under the policy will be triggered if a match is cancelled due to weather, riots, civil commotion or terrorism.
New India Assurance, the government-backed insurer, has underwritten a majority of the injured player policies for various IPL franchisees. The premium rates for player loss fees have increased from 1 per cent last year to 3.5 per cent this year, with the sum insured ranging from Rs 350 million to Rs 450 million for every team. In the IPL 2018, matches between Rajasthan Royals and Delhi Daredevils in Jaipur, and Kolkata Knight Riders and Kings XI Punjab in Kolkata were interrupted due to rain.
However, Datta and Shah aren’t certain that claims can be made for the same. “For the interruption in the two matches, the intimation is being done to ICICI Lombard. However, whether this interruption will result in any
claim payout will be determined once the tournament is over.”, Datta explained. “The event cancellation policy can be invoked only if the entire match is cancelled or in case of a wash out. Teams do not claim insurance for
matches that have to be cut short due to rain, whereas for the broadcaster and sponsors even a partial curtailment of the match may lead to a claim,” Shah said.
The BCCI reportedly owns an insurance policy worth Rs 2 billion covering 25 to 30 contracted cricket players, who are also part of the Indian cricket team. If any of these players miss a game due to injury or illness, half the loss will be borne by the franchisee, while the rest comes from the BCCI. “We will know the full extent of the claims after the tournament concludes. In next year’s tournament, depending on the composition of players introduced by the teams, the loss ratios and premium rates might change,” Shah signed off.
