Sports


Sporting organizations around the world and their liability insurers have to be keeping a close eye on the latest developments in a multi-million dollar settlement which will see the National Football League (NFL) pay out an uncapped amount to compensate retired football players suffering from certain severe concussion-related neurological conditions.

A federal judge approved the preliminary revised settlement yesterday after the original $765 million settlement proposed by the NFL was rejected by U.S. District Court Judge Anita B. Brody in January over concerns that the amount would not be enough to cover the claims from more than 20,000 retired players over the 65-year life of the settlement.

Concerns have been growing over the risks of sports-related concussions in recent years since the filing of the first lawsuits by injured professional football players against the NFL in 2011.

Young people participating in a range of sports including soccer, basketball and ice hockey are also affected. The Centers for Disease Control and Prevention estimates that 173,285 sports- and recreation-related traumatic brain injuries (TBI), including concussions, among children and adolescents are treated in U.S. emergency rooms annually.

The New York Times reports that despite being uncapped, the new settlement does allow the NFL to contest an unlimited number of requests for awards by retired players as a way to prevent fraudulent claims.

Retired players will receive packets explaining the terms of the settlement over the coming weeks and players will be deemed to be in favor of the deal unless they opt out, which would preserve their legal rights, the NYT says. They can also object to parts of the deal.

A fairness hearing on the settlement is scheduled for November 19 in Philadelphia.

The settlement provides for a $75 million baseline assessment program that will offer all retired NFL players baseline neuropsychological and neurological evaluations to determine the existence and extent of any cognitive defects.

The 65-year monetary award fund will award cash to retired NFL players who already have a qualifying diagnosis or receive one in the future.

The court order details potential awards for qualifying diagnoses of up to $3.5 million for neurocognitive impairment, $3.5 million for Alzheimer’s Disease and Parkinson’s Disease, $5 million for amyotrophic lateral sclerosis (ALS), and $4 million for players who die with chronic traumatic encephalopathy.

The awards may be reduced based on a retired player’s age at the time of diagnosis, the number of NFL seasons played, and other offsets outlined in the settlement.

Business Insurance reports that the settlement approval notes that players who receive awards from the NFL fund are not required to release claims against the NCAA (National Collegiate Athletic Association) or any other amateur football organizations for concussion claims.

A 2013 article by then National Underwriter reporter Chad Hemenway provides invaluable insight into sports-related traumatic brain injuries and how the legal fallout may change the way sports are insured.

Check out I.I.I. facts and stats on sports injuries.

I.I.I. chief actuary James Lynch brings us an intriguing tale of workers comp and college football:

The most interesting story in workers compensation these days is playing out, quietly, on the sports page. At least the insurance part is quiet.

You’ve doubtless heard that Northwestern University football players were recognized as employees by an arm of the National Labor Relations Board and earned, tentatively, the right to form a union. The news made The New York Times front page, among others, and merited editorials in The Times and The Wall Street Journal.

Less prominent in the stories is what the players want: workers compensation – or at least some system to pay for the injuries they suffer on the field.

The players, petitioning as the College Athletes Players Association (CAPA), aren’t shy about wanting comp-like coverage. Here’s the second paragraph of their petition to the NLRB (pdf):

Faced with the serious risk of concussions and long-term injuries, the Players seek to bargain over health and safety issues like other employees protected by the [National Labor Relations] Act.”

And they make it clear, in the next sentence, that they aren’t out for money, at least not primarily:

CAPA will not jeopardize the Players’ eligibility by bargaining compensation not permitted by National Collegiate Athletic Association rules, but can bargain additional financial support and protections within the existing NCAA rules, and will speak for the Players as the NCAA landscape continues to evolve.”

The seminal takedown of the NCAA is Taylor Branch’s long, long, click-only-if-you’re-stranded-at-O’Hare opus in The Atlantic magazine’s September 2011 issue. In Branch’s telling (scroll down – wayyyy down – to ‘The Myth of the Student-Athlete’) it was precisely because the NCAA feared workers comp that it fought against classifying athletes as employees. The term student-athlete, he writes, was invented in the 1950s after a widow filed for a workers comp death benefit after her husband died from a head injury he got playing football.

Northwestern is appealing last week’s ruling. If the union gets what it wants, it will likely mean the players could be covered under Illinois’ Workers Compensation Act, like other Northwestern employees.

Northwestern is a private university. Public universities – being state entities – don’t always fall under a state’s workers comp laws. Take, for example, the University of Alabama, a powerhouse program I happened to Google. Its employees are covered by The University of Alabama On-the-Job Injury/Illness program – not part of the workers comp system, but governed by similar principles.

The most interesting what-if discussion I’ve seen on the topic comes from – where else? – Bleacher Report.

(Full disclosure: I used to live about 50 yards from Ryan Field, where Northwestern plays. Talk about noisy neighbors.)

It’s Super Bowl weekend and whether you’re cheering for the Denver Broncos or the Seattle Seahawks, or have no idea who even made the final, the big game wouldn’t be able to happen without the support of the risk management and insurance community.

While it doesn’t look as if a blizzard will disrupt Sunday’s title game at MetLife Stadium in New Jersey, it’s no surprise that event-cancellation policies have been making the headlines.

Earlier this year New York-based broker DeWitt Stern announced that it had designed an event cancellation policy to protect businesses from lost revenue if for any reason the Super Bowl was cancelled or moved more than 60 miles.

In the event a terrorist attack or blizzard causes the game to be cancelled, the policy would respond and cover businesses for loss of estimated potential revenue. The policy is underwritten by Houston Casualty Company.

There are many other risks that insurers will cover, from the Bruno Mars and Red Hot Chili Peppers halftime show (remember the infamous wardrobe malfunction during Janet Jackson’s performance with Justin Timberlake in 2004?), to coverage for broadcasters in the event their transmissions are interrupted due to a technical problem (think back to last year’s championship game in New Orleans when a power outage halted play for 34 minutes).

For more on Super Bowl risks, check out this post at KYForward.com by Kevin Moore, director of Risk Management Services for Roeding Insurance.

And for the betting among you, check out the Super Bowl Prediction System of John Dewan to see which team you should be backing.

May the best team win!

We’re not football people, so the fact that the Super Bowl is happening in our back yard in New Jersey in early February, hasn’t registered yet.

However, the Insurance Information Institute (I.I.I.) just issued a press release that got us thinking, not just about touchdowns and field goals.

Before we look into renting out our house to Super Bowl fans, the I.I.I. cautions us and other like-minded homeowners to first contact our insurer to make sure we’re covered if our property is damaged or if someone is injured.

Apparently the market for properties near the Stadium in East Rutherford, New Jersey, eight miles west of mid-town Manhattan, is booming on peer-to-peer rental websites. Short-term rental prices for homes typically soar when the Super Bowl or other high-profile sporting events come to town.

So how do insurers approach this home-sharing scenario?

According to the I.I.I., some insurers may allow policyholders to use their property as a rental for a one-time, special occasion like the Super Bowl, as long as the insurer is informed about it ahead of time.

Other insurers, while allowing this type of arrangement, may insist on other criteria being met, such as the homeowner acquiring additional insurance coverage.

Some insurers, though, will consider any rental of your home to be a business venture, requiring the purchase of a business policy–specifically either a hotel or a bed and breakfast policy—because a standard homeowners insurance policy excludes losses arising from the operation of a business.

In the words of Jeanne Salvatore, senior vice president, Public Affairs, and consumer spokesperson for the I.I.I.:

Technological advances have allowed for the growth of the sharing economy. But, if you participate, it is your responsibility as a property owner to make sure you’re adequately covered.”

Check out I.I.I. information on the sharing economy and homeowners insurance.

While insured property losses from the Boston Marathon bombing are small, the insurance of sports events is likely to be impacted, according to catastrophe modeling firm RMS.

Dr. Gordon Woo, catastrophist at RMS noted that the shortage of terrorism insurance cover in the years after 9/11 had led to the securitization of the cancellation risk of the 2006 FIFA World Cup.

So while the property insurance loss is small, the Boston Marathon bombing may well have a significant influence on the terrorism insurance market.”

Dr. Woo’s comments came as investigators moved closer to identifying possible suspects in Monday’s bombing which left 3 dead and more than 170 injured.

RMS says most of the property damage appears to be within 10-20 feet of the explosions, and insured property losses are unlikely to exceed $1 million. However, it believes the costs of business interruption as a result of security restrictions made after the event may be a larger source of insurance claims.

The Boston marathon attack was the first high-profile successful act of terror in the U.S. since 9/11, but it should be seen as one of the dozens of terrorist plots launched against the U.S. homeland since then.”

RMS noted that the use of smaller sized lethal explosive devices has been the preferred attack mode in recent terrorist plots. Street events, like the marathon, are inherently vulnerable because while they are very large crowds public access is unrestricted.

Dr. Woo added that plots involving a small number of operatives, such as seems to be the case in the Boston bombing, are the most difficult to prevent:

Terrorism attacks remain a very real threat; there have not been larger attacks only because of the success of plot interception.”

Global Reinsurance has more on this story.

Check out I.I.I. facts and stats on terrorism risk.

While it’s too early to answer many of the questions arising from twin explosions at yesterday’s Boston Marathon, what we do know is that three people are dead and more than 140 injured in the bombings.

Our thoughts and prayers are with the victims, all those injured and their families.

The Boston Globe reports that much of Back Bay is locked down to protect the crime scene and the investigation underway is being directed by the FBI.

Boston.com’s Big Picture has images of the scene at the finish line of the marathon.

Right now, it appears the White House is describing the incident as a potential terrorist attack.
A Politico.com article cites a White House official saying:

Any event with multiple explosive devices – as this appears to be – is clearly an act of terror, and will be approached as an act of terror. However, we don’t yet know who carried out this attack, and a thorough investigation will have to determine whether it was planned and carried out by a terrorist group, foreign or domestic.”

Insurance Information Institute (I.I.I.) president Dr Robert Hartwig narrowly missed the blasts after watching his son cross the finish line of the marathon more than an hour earlier.

In an interview with PC360, Dr Hartwig said it was too soon to know the insurance implications of the event, but it looked like damage to property was light. Dr. Hartwig added that injured public safety and marathon workers would certainly be covered by workers compensation.

An I.I.I. advisory suggests reporters with questions about the potential insurance implications of the Boston Marathon explosions contact Dr. Hartwig.

Check out the I.I.I. website for further updates.

Are you one of the millions of football fans who will be tuning in to Super Bowl XLVII on Sunday? If so, you may want to check out the Super Bowl Prediction System of sports statistician John Dewan.

Regular readers may remember that the system has made incorrect predictions the last two years, but Dewan is hopeful that this year the model will “get back to its winning ways.”

Consider this, the system continues to have a positive overall record of 28-14 (with four non-selections) and is 16 of the last 22, which is 73 percent.

That said, it appears the prediction system’s indicators show the 49ers to be overwhelming favorites to win this year’s Super Bowl.

The system uses 12 indicators to predict the winner. Each one of these indicators predicts the winner more than half the time. But taken together, the system is even more successful.

Dewan notes that the 49ers have the edge in all but two of the indicators. The lone Ravens advantage is in points scored during the regular season, and they only beat the 49ers by a single point, 398-397. The 10 categories the 49ers won were mostly convincing victories, including a 350.9 to 294.4 edge in opponent total yards per game and 2,491 to 1,901 edge in rushing yards for the season.

The Ravens did throw for more passing yards for the season with 3,739 to 3,298, but teams with more passing yards lose the Super Bowl more often than they win it, Dewan adds.

The most significant aspect of this year’s prediction?

Prior to this matchup, 10 Super Bowl teams had 10 or more of the 12 indicators in their favor. Nine of those 10 teams went on the win the game, most recently in the 2008-2009 season when the Steelers beat the Cardinals. Interestingly, the one team that failed to win a game with a 10-category advantage was the first team with that advantage, the Vikings in the 1969-1970 season’s Super Bowl. The Ravens will attempt to be the first team to beat those odds in 43 years.”

May the best team win.

And please heed advice from the I.I.I. to be a responsible host if you’re throwing a Super Bowl party this year.

The #London2012 Olympic stadium, via @VisitBritain on Twitter.

As the final touches are made to the Olympic venues in and around London, let’s take a tour of the insurance stories ahead of Friday’s opening ceremonies.

It should come as no surprise that insurers and reinsurers play an important role in providing billions of dollars in risk coverage for this sporting display that brings together more than 10,000 athletes from some 200 different nations.

Munich Re is shouldering a significant share of the risk in the event of the abandonment, interruption, delay or relocation of the 2012 Games.

Direct from Munich Re’s website, Andrew Duxbury, underwriting manager at Munich Re in London, explains:

Munich Re carries a substantial portion of this risk. If the Games were called off, Munich Re would provide cover of around €350 million [$425.5 million] through several policies. Guaranteeing this amount of cover requires not just financial strength, but also the necessary expertise to allow the risk to be assessed and managed in the best possible way.”

Over at Insurance Journal, an article by Lee Tookey, head of Aviation Reinsurance, Space and Specialty Lines, for Aspen Re speaks to the challenges insurers face in the transmission of the Games to the world.

New technology will allow the live broadcast of sporting events via mobile devices to viewers around the world. There are concerns about whether or not satellites and cellular networks will be able to meet the expected demand.

Tookey points out:

Some events at the games – most notably the opening and closing ceremonies- are expected to attract audiences around the world numbering perhaps four billion: the insurance industry will certainly play an important role in both terrestrial and extra-terrestrial aspects of these Olympic events as they are transmitted.”

And finally, an article from Business Insurance reminds us of the importance of detailed risk management when hosting a sporting event on this scale.

Business Insurance quotes Lance Ewing, hospitality and leisure industry practice group leader at Chartis Inc as follows:

These are formidable risk exposures including health insurance, cancellations coverage, terrorism, kidnap and ransom, travel insurance and property coverage. There also are exposures surrounding the construction of event venues, dormitories and other facilities.”

London’s heightened exposure to terrorist threats during the Games is one of the main areas of concern.  The British government has called in extra troops, police officers and civilian security workers to help keep the Games safe for athletes and spectators.

Who will win Super Bowl XLVI this Sunday?

If you’re wondering whether you should be backing the New York Giants or the New England Patriots look no further than the Super Bowl Prediction System of sports statistician John Dewan.

In his Stat of the Week, the owner of Baseball Info Solutions and co-publisher of ACTA Sports asks us to consider four things:

  1. The Patriots rank 31st in total defense (yards allowed) in the NFL this year.
  2. The Packers, another juggernaut, ranked 32nd and lost earlier in the playoffs.
  3. Defense wins championships, “they” say.
  4. The Super Bowl Prediction System loves defense.

But if you’re thinking this must mean the Patriots are going to lose making the New York Giants the next Super Bowl champs, the Super Bowl Prediction System suggests you’re wrong.

Dewan goes on to note that while the Patriots rank 31st in total yards allowed, it’s points, not yards that count in the score. In points allowed, the Patriots are in the top half of the league ranking 15th (allowing 342 points during the regular season) while the New York Giants rank 25th (allowing 400 points).

He says:

The Super Bowl Prediction System was off its game last year picking the Pittsburgh Steelers. The Green Bay Packers beat the Steelers 31-25. But the system still has a great track record. It has picked 16 of the last 21 winners (76 percent). This year, the system thinks the Patriots will avenge their Super Bowl XLII loss to the Giants.”

Dewan adds that the Super Bowl Prediction System comprises 12 different statistical indicators and each one correctly predicts the Super Bowl winner 55-65 percent of the time. Evaluated collectively, the system is 76 percent in the last 12 games.

By the way, for those of you throwing a Super Bowl party, the I.I.I. has tips on how to be a responsible host.

This Sunday’s Super Bowl is nearly upon us and in keeping with our annual tradition we take a look at the prediction of sports statistician John Dewan to see if we should be cheering for the Green Bay Packers or the Pittsburgh Steelers.

In his Stat of the Week, the owner of Baseball Info Solutions and co-publisher of ACTA Sports says:

The betting lines currently favor the Packers, but the Super Bowl Prediction system picks the Steelers.”

Dewan’s unique Super Bowl prediction system comprises 12 different statistical indicators: five defensive, four offensive and three based on overall stats (the defensive ones are the strongest indicators overall). Each one taken by itself predicts the Super Bowl winner 55 percent to 67 percent of the time.

Taken collectively, the indicators have an even better track record. The system favors the team that wins the most indicators and it has predicted 16 of the last 20 Super Bowl winners.

This year the prediction system picks the Pittsburgh Steelers to win their seventh franchise Super Bowl and third in the last six years.

The system has the Steelers winning nine of the 12 indicators. For the record, teams with eight or more indicators have won 21 of 26 Super Bowls.

Looks like the statistical odds favor the underdog, so place your bets!

By the way, if you’re throwing a Super Bowl party, check out I.I.I. tips for being a responsible host.

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