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He confirmed that a proposal for IPL’s insurance cover for 2013 has come from the Board of Control for Cricket in India (BCCI). However, this year, the cover would see a deduction of “at least Rs 100 crore” than the 2012 edition. Last year too, National Insurance had done the insurance cover for IPL.
In 2011, after India won the World Cup, the 20-over cricketing event got a thumping response and it had got a cover of around Rs 900 crore for that year.
But in 2012, it had to settle with a cover of around Rs 650-700 crore owing to poor ad revenue collection and dismal performance by the Indian cricket team in all the one-day matches that it played.
“It was inevitable that the cover will shrink this year as well. The players’ auction already gave that signal. The total ad revenue commitment will also play a key role. Compared to last year’s cover, this year would see a shrink of at least Rs 100 crore,” said the National Insurance Company official, on condition of anonymity.
The insurance cover for IPL will protect BCCI against any loss of revenue on account of the cancellation of any match due to reasons beyond their control such as terrorism, bad weather, natural calamities, strikes, etc.
BCCI, one of the richest sports bodies in the world, along with broadcaster Sony took separate covers of the same amount in 2011. BCCI had its cover with New India Assurance, while Sony took the same from National Insurance Company. The cover included domestic and overseas media rights, protection of sponsorship fees and other contingencies.
For this year, however, it is not yet clear on whether the mega cricket event will be able to clinch substantial cover on both fronts separately. The average premium for such insurance is 2 per cent to 3 per cent of the sum insured. The sixth edition of the cricket carnival will have 76 matches this year.
According to the official of the public sector general insurer, the final deal will be inked in a week to 10 days’ time. BCCI president N Srinivasan did not respond to Business Standard’s calls or text messages.
“Also, in such policies, very little portion of the risk is retained in the books of the insurance company and a majority of it is reinsured with reinsurance players. General Insurance Corporation of India, the designated national reinsurer, would reinsure 80-90 per cent of the cover,” said an industry expert.
Despite the shrink in cover, IPL insurance would still be higher than India’s other marquee sporting events in the recent times. While the Commonwealth Games was insured for Rs 200 crore, the Formula 1 race was covered for Rs 500 crore.
