Athletes scurry for cover abroad as Indian insurers fail to deliver

Manisha Malhotra has hit a roadblock. The administrator of the Mittal Champions Trust—a Rs40 crore sports training initiative of steel magnate L.N. Mittal—wants to contract specialized sports insurers for the 35 athletes under the trust’s umbrella, but can’t find one in India.

So Malhotra, a former pro tennis player, is taking the only route open to her: health care and sports insurance firms overseas, the people she went to during her playing days.

The Bangalore-based Malhotra’s situation is not unique. Several other sports trying to take off in India say they are having a hard time securing comprehensive insurance and competing in overseas meets that require athletes to have it. While medical insurance is easily obtained, such policies don’t always cover the highly specialized needs of athletes and sporting institutions, planning for unforeseen career-ending injuries, long rehabilitations, even event cancellations and inclement weather.

The problem is somewhat ironic since insurance and a diverse array of sports are fast gaining acceptance in India. According to audit firm PricewaterhouseCoopers, the insurance sector’s growth ranged from 33% to 80% between 2004 and 2006 for private-sector firms, and from 1.5% to 11.6% for those in the public sector.

But sports insurance has had very little role in this growth, despite some initiatives taken by companies such as Bajaj Allianz General Insurance. The concept is relatively alien to this country; whatever coverage is offered by non-life insurance companies, either from the public or private sector, is basically medical insurance against injuries to players.

Often, even this coverage is not provided to athletes, and rarely possible, in sports deemed high-risk as kickboxing; the international partners of professional Indian kickboxers provide athletes their insurance covers.

Even India’s wealthiest sports body, the Board of Control for Cricket in India, says it is stumped by the absence of more comprehensive policies. Chief administrative officer Ratnakar Shetty said the board’s policy can only recover 25% of costs spent on injured players and it is limited to just medical costs; he says since doctor visits and recovery often take place overseas, expenses such as travel and lodging can be exorbitant. Policies range from coverage of Rs3 lakh for young players to Rs10 lakh for players on tour, such as members of the national team.

“Cricket is fortunate,” Shetty said. “It has money. Other sports, the athletes don’t know where to go when they are injured.”

Similarly, organizers of sports events or talent hunts, professional in their marketing initiatives, seldom consider insurance a priority issue.

Thus, it wasn’t surprising that Subhojit Chatterjee, 17, a promising cricketer from Kolkata, looked flummoxed when asked about sports insurance. In Delhi last week, Chatterjee, one of the eight finalists of a talent hunt for fast bowlers organized by PepsiCo India, had no idea what sports insurance was. The two winners of the talent hunt will be sent on a two-week, all-paid for training under the legendary Australian speedster Dennis Lillee at the MRF Pace Foundation in Chennai.

Asked about insurance, PepsiCo India’s executive director of innovation and business development Geetu Verma said: “We’ll also look at insuring them.” “It’s an interesting issue you have raised,” she added.

But as specialized overseas underwriters point out, sports insurance is more than mere coverage for injuries to athletes and competitors. It also involves protection for coaches, directors, volunteers and organizers from lawsuits, from property damage to bodily injuries. In developed markets such as the US, underwriters offer packages to schools and students.

There can also be protection against cancellation of events, litigation against officials for alleged negligence, even assault or molestation charges.

Bajaj Allianz has made some overtures in this area. For the last India-West Indies cricket series at home, it created a compensation cover for official broadcaster Nimbus Communications to protect it from potential loss of revenue in case matches were called off; the package was based on the length of play. “We’re coming out with unique covers,” said the insurer’s spokesperson Santosh Balan.

Yet observers say unexplored areas abound. In Kolkata, on 16 August 1980, a section of the Eden Gardens stadium collapsed killing 16 spectators during a Mohun Bagan-East Bengal soccer match. Families of the victims were given monetary compensation by the state government, but the words “insurance” or “lawsuits” never cropped up.

In the US, companies such as SportsInsurance.com offer protection against lawsuits arising out of injuries to spectators. In Kolkata, the mecca of Indian football, even medical coverage seems to be reserved for the upper echelon of players. Former India footballer Basudeb Mondal said, when he was injured last year, MohunBagal, a prominent club, picked up his expenses through its health insurance. “When I was a junior, I never had any insurance,” he said. “I had to pay on my own.”

Robin Roy, associate director of PricewaterhouseCoopers, says professional sports is not big in India, hence the situation. “The market for sports insurance products can be subsumed in life and accident products,” he said.

That explains the Mumbai-based Insurance Institute of India secretary general S.G. Gidwani’s response: “I’ve never heard of sports as a branch of study anywhere in the world,” he said, asked why his institute does not have a course dedicated to sports insurance.

Gidwani says despite the mushrooming of sports insurance companies in countries such as the US, the UK and Australia, the total sports insurance premium worldwide accounts for less than 1% of the cumulative premium straddling all categories of insurance products.

Health insurance is big, sports insurance isn’t, he says. Steve Boucher, director of international business development at Sports Cover Group of Australia, concedes sports insurance may not be the largest or most attractive market around for general insurance companies.

“In comparison to household or motor, we are talking about a relatively small target market,” he said in an email interview. “However, 1% of global premium is still a large number for a specialist market.”

Boucher says his company believes there is room for growth, even in India, and is not averse to having an Indian associate to tap the market. In his estimate, the Australian sports insurance market alone is worth over A$60 million (about Rs200 crore).

Sports Cover is one company that Mittal Trust’s Malhotra has contacted after difficulties arose in negotiations with BUPA of UK, which offers policies for international tennis players and small groups such as Mittal Trust. BUPA did not respond to an email query for comment. Malhotra said she wants coverage for athletes’ fatigue and rehabilitation programmes, and the British company isn’t willing to provide it.

Malhotra, who is holding simultaneous talks with US insurance players such as Blue Cross & Blue Shield, is hopeful of a deal being finalized over the next two weeks. “I’m leaving for the UK on 29 May … hope to wrap it up before I return.”