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July 2010Brazil focusEvent Cancellation and linked productsNick FerrierHead of Business DevelopmentLiberty Syndicates

Liberty Syndicates “Must See Market”• “The views expressed in this presentation are thoseof the speaker and may not necessarily be the viewsheld by Liberty Syndicate Management Limited(“LSML”). This presentation does not purport toconstitute advice as to the coverage or scope ofcoverage available. For advice on coverage or scopeof coverage available please contact a specialisedbroker. LSML accepts no liability for errors oromissions in this presentation and accepts noresponsibility for loss or injury which may occur as aresult of reliance placed on any part of its contents”

Liberty Syndicates “Must See Market”“For athletes, the Olympics are the ultimate test of theirworth.” - Mary Lou Retton

Liberty Syndicates “Must See Market”What are major sporting events worth?The commercial value of events such as the OlympicGames or FIFA World Cup has increased considerablyover the past 20 years.The main commercial drivers are:•TV rights•Sponsorship

Liberty Syndicates “Must See Market”Insurance productsMitigate financial loss at sporting events• Event cancellation• Event liability• Ancillary products

Liberty Syndicates “Must See Market”Olympic coverThe financial burden of the games is split betweentwo interests:•IOC•Olympic Committee of the host city

Liberty Syndicates “Must See Market”IOC – insurance coverageAon Benfield place revolving facility for the IOC from onegames to the nextProtects income stream from loss of television rights•Estimated layered cover of $1 – 2bn*•4 year policy covers up to 3 games•Combination of specialist contingency and propertycatastrophe markets* LSM estimate

Liberty Syndicates “Must See Market”Host cityOlympic committee responsible for arranging own coverKey income streams:• Ticket sales• Associated tourism

Liberty Syndicates “Must See Market”FIFA World CupFIFA policy estimated at $1.5bn*• Ticket sales covered under FIFA main policy– Local organising committee needs less coverage• Difficult placement in 2002• Previously used cat bonds as risk transfer solution• Cover understood to be already placed for 2014* LSM estimate

Liberty Syndicates “Must See Market”Event CalendarScope of ServiceNature of ServicesInsurance BrokerageEvent Risk ManagementEvolution of Risk Management at the Olympic gamesEarly 1990’sBarcelona, LillehammerCoreReactiveMid 1990’s ‐ Early 2000’sAtlanta, SydneyEnhancedRisk ControlRecent PastAthens, BeijingComprehensiveRisk MitigationProactive

Liberty Syndicates “Must See Market”Event cancellation provides cover for when things go wrongLosses do happen, and they happen more frequently thanyou would expect

Liberty Syndicates “Must See Market”Event cancellationWhat is at stake?• Expenses incurred in staging the event• Additional costs• Refunds• PenaltiesLost profit

Liberty Syndicates “Must See Market”Lloyd’s is a specialist reinsurerLloyd’s provides expert underwriting capability• Large risks• Specialist risksOnly licensed to underwrite reinsurance in Brazil• Admitted reinsurerLloyd’s Syndicates have considerable expertise in theevent cancellation / liability market

Liberty Syndicates “Must See Market”Event cancellationCan provide coverage for the risk of disruption that isbeyond the control of the insured•Availability of venue•Failure of utilities•Terrorist event•Adverse weather•Outbreak of infectious diseases - pandemics•Civil disorder•National mourning•Boycott by a major nation

Liberty Syndicates “Must See Market”Difference in policy formsReview of typical Brazilian event cancellation wording• London market wording (LMA 3053) can providecoverage for expenses only or gross revenue(expenses + profit)• Tighter wording – protects the insurer– Warranties, e.g. void policy in event of fraudulent claim– Average clause – applies in event of underinsurance– Exclusions, e.g. terrorism, NCBR, communicable disease• Note that exclusions can be ‘written back’ into thepolicy for additional premium

Liberty Syndicates “Must See Market”Event LiabilityThe general public are becoming increasingly aware oftheir legal rights•Every person at the event who slips or trips is apotential claimant•Every piece of equipment used has the potential to bedamagedWho pays if there is serious damage to the venue?

Liberty Syndicates “Must See Market”Event liability - products• Public liability• Employers liability• D&O / E&O• Damage liability

Liberty Syndicates “Must See Market”• Personal AccidentLinked products– Lloyd’s is the leading PA underwriter of specialist risks• Prize indemnity– Promotions– Competitions• Contract bonus• Death and disgrace– Cancelled sponsorships• Other: marine, property, etc

Liberty Syndicates “Must See Market”Other eventsSporting• Regional and domestic events• Motorsport, football, athletics, swimming, etcEntertainment• Festivals• Pop & rock concerts• CarnivalsConferences• Global industry events• Company events

Liberty Syndicates “Must See Market”So what are the opportunities?Target clients• Rio Olympic organising committee– Ticket sales– Associated events– Hoteliers• World cup host cities– Local government, tourist board– Local sponsorship / endorsements– RetailersAnyone with an interest that is linked to these events

Liberty Syndicates “Must See Market”Lets work togetherLiberty Syndicates can develop products with you• Technical underwriting capability• Risk management expertise and support• Capacity available

Liberty Syndicates “Must See Market”There is a strong analogy between sport and riskmanagement / insurance“When you control the ball, you control the score” -Pele

Liberty Syndicates “Must See Market”Must See MarketContact:Nick FerrierLiberty Syndicates, LondonPlantation Place SouthGreat Tower StreetLondon, EC3R 5AZT: +44 (0)20 7070 4472Florian KummerLiberty Syndicates - Brazil17th Floor, World Trade CentreAu das Nações Unidas, 12551Brooklin NovoSão Paulo, 04578 - 000T: +55 113443 1532Yael MimranLiberty Syndicates - Paris5, rue Francois 1er75008, ParisT: +33 (0)1 58 36 00 00