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BCCI scrambles for World Cup cover

BCCI scrambles for World Cup cover
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First Published: Fri, Feb 04 2011. 10 12 PM IST
Updated: Fri, Feb 04 2011. 10 12 PM IST
New Delhi: The Board of Control for Cricket in India (BCCI), the game’s administrator and co-host of the World Cup, is seeking a Rs 400 crore insurance cover for various types of disruptions.
This will include risk coverage against terrorist attacks, inclement weather and the death of national political leaders, all of which could lead to stoppages and entail a commercial loss to BCCI by way of gate money and sponsorship payments.
The tournament that’s due to begin on 19 February—the third time it is being held in the subcontinent—excluded Pakistan as a venue following a spate of terrorist attacks and political turmoil there. Several international players had expressed reservations about playing in the subcontinent at all. The event that’s being held in India, Bangladesh and Sri Lanka ends on 2 April and features teams from 14 countries.
Insurance premiums for terrorism cover have been rising in the past few years due to increased risk perception in the Indian subcontinent. Rates were raised by nearly 30% following the terrorist attacks in Mumbai in November 2008.
“BCCI has sought an insurance policy for protection against cancellations arising out of terrorist attacks or bad weather. In addition, they also require cover for cancellations on account of deaths of national leaders as (this) could lead to an announcement of national mourning,” said an insurance company official with one of the four public sector general insurers in the race to win the contract.
BCCI will have to pay a premium of around Rs 7-8 crore for the insurance cover of Rs 400 crore.
The sport’s organizer met insurance officials on 15 December, but hasn’t signed any contract as yet. The cover should ideally have been finalized at least a month before the beginning of the tournament, said an official with another public sector insurer.
Ratnakar Shetty, tournament director for the International Cricket Council (ICC) World Cup 2011, did not respond to calls and text messages seeking comment on the insurance cover.
It is not clear if all the four state-owned general insurance companies—Oriental Insurance Co. Ltd, New India Assurance Co. Ltd, National Insurance Co. Ltd and United India Insurance Co. Ltd—will jointly provide cover or whether some of them will do so in partnership or singly.
The national reinsurer, General Insurance Corporation of India (GIC Re), will provide reinsurance support to the firms insuring the tournament.
BCCI is negotiating with the insurance firms, and a final decision has not been made, said Yogesh Lohiya, chairman and managing director of GIC Re. “Once the cover is finalized, we will provide the reinsurance support,” he added.
The administrator will take insurance separately for the Indian team players and officials. Although a final decision has not been reached, BCCI is likely to purchase a cover of around Rs 2.5 crore per player, according to an insurance company official.
ESPN, the official broadcaster for the ICC World Cup, has separately got itself insurance cover of Rs 600 crore at a premium of Rs 9 crore for the World Cup. All the four public sector insurance companies will jointly provide the cover with GIC Re providing reinsurance support.
BCCI and the cricket boards of Sri Lanka and Bangladesh will receive revenue from ticket sales as well as hosting fees for the World Cup, said James Fitzgerald, an ICC spokesperson. ICC sells all the other commercial rights, and the global cricket governing body will eventually share the profits from the tournament equally among its 10 member nations, with some amount going to the associate members as well, he said.
Rasul Bailay contributed to this story.
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First Published: Fri, Feb 04 2011. 10 12 PM IST