EventCover managing director talks about eye-opener

EventCover managing director talks about eye-opener | Insurance Business New Zealand

Hospitality

EventCover managing director talks about eye-opener

He says the conversation around event insurance has changed

Hospitality

By
Terry Gangcuangco

EventCover managing director Stuart Hartley (pictured) is looking forward to what he hopes will be a “dry and calm” summer of events. Here the Auckland-based event insurance specialist talks about what’s happening in the market and how the conversation around coverage is changing.

Speaking with Insurance Business, Hartley said: “We went through the earthquake 10 years ago; we went through the terrorist attack; we’ve now gone through a communicable disease; we’ve now gone through adverse weather.

“From the conversations I’m having in the event space, it’s very much, ‘What’s next?’ So, [event professionals are] constantly now looking over their shoulder as to what else is going to be thrown at them.”

Need for event insurance

According to Hartley, the need for cover has never been greater, given that events are also getting bigger and are now carrying more risk. In the managing director’s view, the above – from the pandemic to natural disasters – has “been an eye-opener” for the likes of event promoters and organisers.

Event insurance, Hartley suggested, is no longer a nice-to-have but a need-to-have.

“It’s a serious consideration,” he told Insurance Business. “Years ago it was kind of a nicety if they could afford it. Now it’s a real consideration in respect of, ‘We have to have it’, but at the same time it’s a hard market. Rates have increased. Capacity is still there, but losses have been suffered.

“We have suffered some large losses over the year, but we’re still having conversations. We’re still having real conversations regarding, ‘Is cover available; how much is it going to cost; we’ve suffered claims – can we still take out cover next year?’”

What’s changed?

Hartley, whose underwriting agency began trading half a decade ago, noted that changes are happening on both the provider and client sides of the fence.

“Insurers are more selective in the types of risks that they will allow us to take on,” he said. “We’re now seeing larger deductibles, so promoters are having to self-insure more than they did previously. I remember years ago you would never have a deductible or an excess on an event cancellation policy. Now you’re probably looking at a minimum of 2.5% of total insured value.

“There are more conversations around how to best structure it for the best price – whether that is carrying a higher self-retention, looking at a first-loss limit, or insuring a section rather than the total loss. There’s a lot of conversations taking place now as to how the policy is structured so clients can afford it.

“It’s not, ‘We can’t afford it, so we’re not taking it out’. It’s, ‘We have to have it, but we’ve only got a certain limited budget, and what can we get for that price?’ So, we’re structuring it in different ways than we ever have done previously. Capacity in New Zealand is there; it’s just costing a little bit more to take it out.”

Claims-wise, it has also been a whole different story, according to the MD.

“Between March 2018 (when EventCover was launched) and December of last year, we’d had no claims,” said Hartley, who believes event professionals now have a clear understanding of the reasons why they should take out insurance. “From December last year, we had a lot… Most of the cancellations which took place this year, we were involved with.

“It’s taken a while for these claims to be paid – due to the sheer pressure on the loss adjusters, because they were focussed on a lot of property claims as well – but all our claims are pretty much paid… We’re now focussing on next year’s events. The schedule over summer is pretty busy, and it’s shaping up to be a good summer of events, really.”

The focus, Hartley pointed out, is on making sure that there’s available capacity, there’s support on the ground, and that the events industry knows where to go and who to speak to with regards to taking cover.

“EventCover started in 2018,” he said. “The conversation has certainly changed over that period, from us having conversations with brokers in respect of education around this product, to now being approached by brokers who, in turn, are being approached by larger promoters.

“I think we’re in a better position now to have those conversations across the different channels to make sure that events in New Zealand are specifically covered for the right levels of cover at the best possible price in the current market.”

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