Vol: 44 Issue: 1 | May 2021
No thanks to COVID-19, this year’s Olympic Games in Tokyo, set to begin on 23 July, will be very different to previous events.
Fewer spectators, temperature checks, long lines, social distancing and masks can be expected. Organisers could also reduce the number of athletes and officials allowed to participate in the opening and closing ceremonies, as well as the amount of time the more than 11,000 athletes can stay at the Athletes Village.
Athletes from 33 sports are expected to compete in 42 Olympic venues across Tokyo Bay Zone and Heritage Zone. The Athletes Village is located right between the two zones.
Participants are not likely to be forced to get vaccinated against COVID-19. However, International Olympic Committee (IOC) president Thomas Bach said in January that the IOC would work with National Olympic Committees to encourage and assist their athletes, officials and stakeholders to get vaccinated in their home countries, in line with national immunisation guidelines, before they go to Japan.
‘The IOC continues to strongly support the priority of vaccinating vulnerable groups, nurses, medical doctors and everyone who is keeping our societies safe,’ says Bach.
But according to a Reuters report, Japan has trailed most major economies in starting COVID-19 inoculations and may have problems securing enough vaccine supplies on time. The report also forecasts that it will be months after the Olympics before Japan achieves a 75 per cent inoculation rate — the benchmark for herd immunity.
A RISK ASSESSMENT
So how risky will the Games be?
Allianz, a sponsor of the Tokyo Olympics, points to the residual risks associated with any live sporting event — especially one that goes for more than two weeks, involves thousands of athletes and is watched by millions globally.
‘The main risks generally associated with hosting the Olympic Games have not significantly changed over the past decade,’ says a spokesperson for Allianz.
‘This includes stadium and infrastructure issues such as bad weather or fire; liability issues such as slip and fall; event contingency or cancellation issues like terrorism or a cyber attack; spectator and public viewing issues such as riots; travel issues around cancellations; or even public health or pandemic concerns such as the coronavirus pandemic, which led to the postponement of Tokyo 2020 to 2021.’
The Allianz spokesperson says there is much at stake at large sporting events, including advertising and broadcasting rights, infrastructure projects, multi-billion-dollar investments from both the host country and the sponsors, the preparation and financial commitment required from national sporting delegations, as well as the private travel expenses of millions of visitors from all over the world. ‘Firms who buy insurance also include travel companies, airlines and retailers.’
And while cyber exposures pose a relatively new and increasing risk for major sporting events, the spokesperson points to a flip side: ‘Although the Olympic Games is large in scale and becoming technically more complex, safety features within stadiums have continuously improved, which mitigate many of the risks. And organisers collaborate closely with respective authorities and advisers to develop contingency plans and risk-prevention plans.’
THE IMPACTS OF COVID-19
Tim Thornhill, director of entertainment and sport at Tysers Insurance Brokers in the United Kingdom, says COVID-19 exacerbated these risks because it necessitated a significant change in financial modelling for the IOC, broadcasters and the City of Tokyo.
The Willis Research Network notes that catastrophic events affecting the Olympic Games have the potential to result in high-impact, long-term consequences for the cities that host them.
‘People, infrastructure and entire supply chains are at stake,’ it says. ‘It isn’t just the athletes that gather, but support staff, media, fans and volunteers. New infrastructure is built and specialist equipment is commissioned and shipped. Merchandise and sponsorships are secured and printed. Risk assessments and planning happen years in advance.’
Leigh Ann Rossi, chief operating officer at United States-based NFP Sports and Entertainment Group, adds: ‘COVID-19 heightens the risks of holding any event due to the possibility that the event can be cancelled by local government or the athletes can become sick and need to quarantine.’
She says the types of insurance that could be affected by the impacts of COVID-19 on the Games include event cancellation, medical insurance and player disability insurance, to name a few.
‘While communicable disease is currently excluded from event cancellation insurance, it still makes sense to purchase the coverage to protect against all of the other perils beyond the control of the event organiser,’ says Rossi.
Nate Watson, managing director in NFP’s Property and Casualty Division, Cross Border Insurance, adds that a number of countries currently require visitors to carry travel, medical, emergency evacuation and, in some cases, trip delay (quarantine) coverages. Others have created mandatory programs that visitors must purchase during the visa issuance process.
‘It’s a reasonable expectation that Japan would adopt one of those approaches,’ he says.
EXTRA CHALLENGES FOR TOKYO
There are also risks specific to the Games being held in Tokyo.
According to Allianz, one is the risk of natural disasters. ‘Located in the seismically active “ring of fire”, Japan is especially vulnerable to the ever-present risk of earthquakes, as well as other natural calamities such as heavy rainfall, heatwaves or typhoons,’ says the Allianz spokesperson.
The spokesperson adds that cyberthreats are another key risk for a high-tech and strongly digitalised and connected nation such as Japan. To counter this risk, Allianz says the Japanese Government, together with the Tokyo Organising Committee and the IOC, ‘will do everything to combat the threat of both conventional and cyberterrorism’.
‘The safety and prevention concept is very advanced, including an elite unit of police and defence ministry experts to counter cyberthreats, regular counterterrorism drills, facial recognition systems and very advanced surveillance, crowd control and anti-terrorism measures,’ says the spokesperson.
The Willis Research Network says these Olympic Games will be one of the most technologically advanced sporting events in history.
‘Athletes, media and officials will be transported in autonomous vehicles to smart stadiums that will provide a seamless user experience for fans and visitors, including digital signages, online refreshment services, real-time match and athlete information and access to real-time data on transport congestion.
‘Spectators will interact with human support robots and complete streamlined security checks using the latest technology.’
CYBER AND TERRORISM
With cyber attacks a major concern, the Willis Research Network warns that security at the Tokyo Olympics must be ultra-tight.
Indeed, the Tokyo Games were hacked in 2020. According to a BBC report, Russia’s GRU military intelligence carried out ‘cyber reconnaissance’ against the 2020 Tokyo Games — before they were cancelled — with the aim of disrupting them.
‘Ever since the 1972 Munich Olympics, where terrorists kidnapped and killed Israeli athletes, crowded spaces like sporting and entertainment venues have become attractive targets for international and domestic terrorists alike,’ the Willis Research Network report adds.
No wonder Tokio Marine Nichido in Japan began selling terrorism insurance policies in March last year, covering property damage resulting from acts of terrorism and violent demonstrations.
‘The Games will be significantly different in their operational nature to previous Olympic Games which had large over-subscribed crowds,’ says Tysers’ Thornhill.
‘The crowds will be less diverse and will have a significantly different demographic spread to previous games. That said, every Olympics is unique and memorable, and predominantly for the quality of the sport and the high performance of athletes at the event.
‘I have no doubt that while different, it will be an Olympics to remember.’
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