Protection at the World Cup

In June 2014 the FIFA World Cup tournament kicked off in Brazil to support and cheer on 32 national teams as they competed for the title of the world’s best.  Organisers and Government officials made security a major priority as the potential for terrorism, crime and civil unrest loomed large.  The event came on the heels of the 2014 Winter Olympic Games in Sochi where headlines before play began warned of possible dangers like “black widow” suicide bomber attacks.

Manchester United winger Adnan Januzaj received a number of death threats over his decision to represent Belgium at international level.

The question is whether World Cup spectators will also face a threatening situation, but for different reasons.  Last June demonstrations and riots took place throughout Brazil during the 2013 FIFA Confederations Cup, a warm-up event to the World Cup.  More than a million people took to the streets to not only protest the amount of government spending on preparations for the games, but to express deeper concerns regarding government corruption and financial mismanagement.  The First Capital Command, the country’s largest drug cartel even threatened to organise a “World Cup of Terror” during the games, vowing that the mass violence that had ignited in the Brazilian Streets would not subside in 2014.

Crime in Brazil

There is no denying that Brazil has a crime problem.  Protection at the World Cup is vital. There are regular robberies, muggings, kidnappings and even “quick nappings” in which criminals abduct victims from outside banks or ATMs in order to receive a quick payoff from the victim’s family, business or ATM card.

A 2013 study by the Latin American Studies Centre found that, from 1980 – 2011 more than one million people were murdered in Brazil.  During that 30 year period the homicide rate climbed 132% from 11.5 murders per 100, 000 inhabitants in 1980 to 27.4 per 100, 000 inhabitants in 2011 – the seventh highest rate in the world.  What’s more only 8% of reported crimes are solved.

To their credit, Brazilian officials have not turned a blind eye to these problems, especially as they prepare for the World Cup and the 2016 Summer Olympic Games in Rio.  Police Pacification Units have been conducting operations in Rio to clear drug gangs and reduce intergang violence.  The government also plans to employ 170, 000 security personnel and spend almost $800 million on security measures in the World Cup alone.  This includes high tech measures such as unmanned surveillance aircraft and multi-use robots that can analyse and remove suspicious packages.

While homicide numbers and security measures are hardly what Brazil want in its tourism brochures, they are clearly not enough to stop more than half-a-million soccer fans, corporate sponsors, executives and media from descending on the country.  These individuals all need to understand how to stay safe.

When underwriting coverage in hostile areas, rates can vary based on multiple factors, such as security arrangements, travel vendors and length of stay.  In very hostile areas, rates even vary down to specific latitude and longitude coordinates within a single city or locale.  This coverage can encompass everything from accidental death, disability and dismemberment coverage to kidnap and ransom, evacuation, return of remains, extraction and medical and emergency assistance.

In the past, such coverage often required multiple policies to properly protect travellers. This was a daunting task for both the insurance broker and the traveler, an often not very cost-effective.  In the wake of Sochi, specialty underwriters have recognised the increased need for an all-encompassing traveler insurance policy and created one aggregated policy form and marrying that with security consulting, consumers and insurance advisors can acquire protection in a more stream-lined fashion.

Coverage with this new product protects the insured immediately upon leaving American soil, but its value begins long before then.  As a risk mitigation tool, underwriters are now providing their policyholders with a pre-trip World Cup security briefing that highlights various threats in the region and offers counsel on how to best mitigate those threats.  International cell phone numbers are gathered and urgent security push notifications can be sent via text to policyholders if an outbreak of violence erupts.

Policies typically range from $1 million to $5 million but, for extremely wealthy travellers, limits up to $100 million can be deployed.  In the speciality insurance world, all men are not created equal.  High profile VIPs like soccer star David Beckham will have to pay a lot more for coverage than two anonymous soccer fans from the Midwest.

The possibility of kidnapping is one of the bigger challenges.  The kidnap and ransom component of these travel insurance policies covers expenses for the services of experienced crisis management teams, which includes highly skilled professionals, such as former CIA, FBI, Secret Service and military police personnel.  Their purpose is to assist in negotiating the safe release of kidnap victims.  If a ransom is required, they are skilled at negotiating the payout while making safety the top priority.  It is important that anyone buying these policies should keep the purchase strictly confidential as potential kidnappers may view such insurance as a source of ransom funds.

Munich Re is one of about half a dozen major backstops for FIFA, media rights holders, sponsors and anybody else with a larger financial stake in the World Cup.  Along with competitors such as Swiss Re and Hannover Re it sets the market for as much as $2 billion in insurance covering the event.  If matches are cancelled, delayed, or interrupted by weather, violence, stadium failures – anything that falls “outside of the control” of the insured – Munich Re helps cover sunk costs.  This makes the company an expert in everything from meteorology and crowd control to political climates and stadium construction.

In the 7 years since Brazil was named host for 2014, a team of roughly a dozen Munich Re employees has been gaming out the universe of potential risks.  This means looking at drainage plans, past cancellations and event protocols and even then they do not know for sure.

The 2022 World Cup

The 2022 World Cup event is facing threats from ambitious terrorists.  The Islamic State of Iraq and Syria issued a bizarrely polite threat to FIFA warning them not to hold the 2022 World Cup in Qatar.  Regally addressing the FIFA President by his full first name “Joseph” the terror group suggest Mr. Blatter had better find a replacement venue for the Qatar event, while nonchalantly mentioning the long-range scud missiles ISIS claims to have acquired, which would put the Kingdom well within their strike range.

Image source: AFP