5 things insurance brokers need to know about esports
Modern day risks require modern day solutions
The esports revolution will not be televised: it will be streamed. Hundreds of millions of fans and active participants have taken esports from being a laid-back armchair activity to a high level of professionalism. Many of its participants, ranging from keen amateurs to newly formed teams to elite competitors, will need to be insured. In this article we look at the five things insurance brokers need to know about esports.
1. Esports is on track to appear the 2024 Paris Olympic Games as a side event
An esports ‘virtual’ Olympics is no longer a science fiction fantasy. Can you imagine a day in which thousands or even millions of marathon runners line up to take on world record holder Eliud Kipchoge from the safety and comfort of their living room?
Yet virtual reality headset technology exists today to create a virtually perfect simulation of a marathon track. All budding virtual Olympians would need to do is hop on their running machine and bark the instructions: “Alexa, ready, set go!” to find how close they can get to Kipchoge’s sub 2-hour record.
Maybe that sounds a bit far-fetched but consider that esports is still on track to appear at the Paris 2024 Olympic Games as a side event according to the IOC Organising Committee President Tony Estanguet. World Sailing has submitted a proposal for offshore racing, which would see fans compete virtually against the Olympic athletes in real time. Estanguet also suggested that there could be events for cycling and rowing. It just goes to show that esports have gone from being a niche activity to a global activity with potentially millions of participants in a very short period.
2. Professional sporting events turning to esports alternatives with coronavirus shutdown
The coronavirus outbreak resulted in postponement or cancellations of sporting events worldwide. Some spectators and additional players have turned to esports to fill the void. Despite the Australian Grand Prix being cancelled, professional Formula 1 drivers such as Lando Norris raced against esports professionals and YouTube starts in a virtual Australian Grand Prix. Cycling and football are also among the sports turning to virtual alternatives.
3. At the elite esports level there is a real need for insurance covers that offer similar protections that a professional football, basketball, rugby or any other sportsperson would require.
With increased levels of fame and pressure, video gamers must ensure their physical health and wellbeing remain a priority. If a gamer sustains an injury in their day-to-day lives, whether in the form of broken bones in their hands or body, or an eye injury that may affect their vision, it could affect their ability to earn prize money from esports as well as earn or retain lucrative sponsor deals. Whatever the injury may be, the need for personal accident and disability insurance is on the rise.
4. The lack of current esports standardisation is a huge opportunity for the insurance market
AXIS has been forging links and partnerships with players’ unions, expanding into new openings, most notably and recently with Counter Strike esports gamers via the CSPPA (Counter Strike Professional Players’ Association).
Mads Øland, CEO of CSPPA, said: “We have a special focus on ensuring that the players are having the necessary insurances and are finalizing the first of its kind collective bargaining agreement for teams and their employed players. Part of this agreement ensures that an agreed amount is specifically marked for insurance cover. The cover itself is then to be decided and signed by the CSPPA on behalf of the players. The players will be able to choose insurances and have the mandate to negotiate the best possible terms and conditions.”
Arrangements such as this have allowed AXIS to identify the potential need for covers, and how to best create such insurances, providing the best conditions and cover for all players across their teams and different nations.
5. In this new market, insurers need to re-evaluate their underwriting approaches
Insurers need to adapt underwriting appetite, risk analysis and policy wordings to ensure they remain relevant and able to capitalise on the emerging opportunities.
Technology is also giving rise to related racing events. Teenager Luke Bannister from the United Kingdom out performed 150 global teams at the Dubai World Drone Prix, the first truly global drone-racing event. Bannister became the first World Drone Prix champion, winning $250,000.
The world of esports is in a bit of a Wild West climate at the moment: it’s all in flux, so any A&H insurers or brokers going into this emerging market thinking that it’s going to be like doing business with the Lawn Tennis Association will be in for a shock. You’ll be just as likely negotiating insurance coverage with a 15-year old gamer’s bemused parents as you would normally be with a football team agent, finance director or treasurer. Having said that there are many experienced people within traditional professional sports moving to esports. As a result, it is likely to become a mature market much more quickly than other sports achieved this.
My message to brokers is that AXIS is looking to provide flexible and innovative solutions that meet the needs of this fast-growing market.
Authored by Guy Bonwick, Head of A&H International at AXIS
If you would like to talk to Guy about AXIS' capability in the eports arena, CLICK HERE, leave a message and youTalk-insurance will pass your enquiry on.
At AXIS, specialty insurance and global reinsurance solutions are delivered with determination, passion and strength.
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