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Insight
touchline
The journal of spor t & r isk with an international perspective
Issue 2
Sportscover endeavours to ensure that the information contained in touchline is correct at the time of publication, and cannot be held responsible for any errors or omissions made.
Contents
Insight
On Track
Legal
Profile
Contributors
Martin Kelly, Steve Boucher, Chris Hootton
Tanya Blake, Maura Manning
For information on advertising in touchline, email us at touchline@sportscover.com
So are there any in the financial
world who will come out of this crisis
unscathed? Well most observers
appear to agree that one group of
insurers that will win out of the crisis
are Lloyd’s underwriters.
The way that Lloyd’s syndicates
are required to hold their assets
means that the risks are much lower.
Many, like Sportscover, have a very
conservative investment policy which
requires them to hold their reserves
in cash and government bonds – the
best performing asset classes at the
moment. Add to that the chain of
security behind a Lloyd’s policy and
the Lloyd’s brand is at an all time
high. This should lead to Lloyd’s
underwriters seeing more business
than ever before.
But what of more important things…
like sport! One of our lead articles
(Sponsors heading for relegation)
looks at the way in which the financial
crisis is affecting sponsorship in sport.
Its impact is being felt from football
to formula 1. We also look at how this
could jeopardise the 2010 World Cup.
And, to help keep you informed, we
have a number of articles on some of
the latest studies and legal outcomes
relating to sport around the world.
Add our usual features and your
letters and I hope that you will enjoy
this edition of Touchline; a little oasis
in the world of depressing financial
news!
Best wishes,
January 2009
Crisis,
what Crisis?
As I read the newspapers or watch
the TV news, it is easy to think that
the whole of the financial world is in
freefall, never to recover.
It seems inconceivable now, but just
over a year ago the financial markets
were riding high and it seemed
that the only way was up. But then
it hit, slowly at first, but then with
increasing destructive force until
governments all over the world were
forced into pledging ridiculously high
sums of money to shore up banks
and major industrial companies.
For many of us in the insurance
industry, perhaps with a few notable
and high profile exceptions, we could
be forgiven for thinking, “crisis…what
crisis?”.
This disaster was not of our making
and to a very large extent we have
been onlookers so far. However, I
have no doubt that over the coming
twelve months and longer we will
see some insurance companies being
impacted by the crisis. Even for the
many insurance companies that
steered clear of the dubious financial
derivatives that some thought were a
sure-fire way of making a quick buck,
there will be other concerns. Some
will be affected by the increase in
directors and officers insurance policy
claims from disgruntled shareholders
of now defunct corporations and the
inevitable rise in fire losses arising
from properties that have fallen in
value but remain insured for greater
sums. Strange how a recession
leads to an increase in property fire
losses!!
Other companies will be severely
affected by their own decreasing
stock price and the asset value of
their investments and reserves.
Steve Boucher
touchline@sportscover.com
