Tag Archives: speciality insurance

Insuring body parts

As long as a person is willing to pay the required premium, anyone can insure a body part of their choice. The 40 members of the Derbyshire Whiskers Club insured their beards against fire and theft for $32 each. This is called speciality insurance and before an entertainment company or athletic club pays any high premium for mega income-producing stars or athletes, they would have obtained the maximum possible insurance via standard life and disability cover. Your finger that moves the trackpad on your laptop could be insured by you, however, buying disability in this instance would be more economical.

It is the norm for entertainment companies and athletic clubs to obtain speciality insurance for huge cash-earning celebrities, as well as high-income athletes. Real Madrid renewed the insurance policy for Cristiano Ronaldo, valuing his legs at a whopping 103 million Euros against serious injury. Goalkeeper and Real Madrid captain Iker Casillas has his hands insured for 7 million Euros. Certain speciality insurance companies will insure the insured’s whole body but exclude the part that is most at risk. Factors which are taken into account are yearly income, type of sport, age and injury history.

Ahead of the 2014 Soccer World Cup Germany’s squad was valued at an insurable amount of 795 million Euros. This research was produced by the Centre for Economic and Business Research for Lloyds. The amount is calculated as the discounted sum of players’ future earnings, both from endorsements, salaries and bonuses.

One of the earliest body part policies was taken out by Ben Turpin. He worked in vaudeville, burlesque and circuses in the 1920s. Turpin had a distinctive appearance, with a small wiry frame, a brush mustache and crossed eyes. He insured his eyes and would have collected $20, 000 if his eyes had gone straight. A man most remembered for his legendary drinking talents, Aussie cricketer Merv Hughes insured his handle-bar mustache for $370, 000 during his cricketing days as a member of the Australian national team. The Welsh baritone Tom Jones was rumoured to have insured his chest hair for $7 million. The geriatric crooner still has the power to make the ladies swoon and he apparently considers his luxurious pelt an essential aspect of his sex appeal.

Keith Richards is an English musician, singer and songwriter and one of the original members of the English rock band, the Rolling Stones. Rolling Stone magazine credited Richards for “rock’s greatest single body of riffs” on guitar and ranked him 4th on its list of 100 best guitarists. His hands are insured for $1.6 million.

Egon Ronay was a Hungarian-born food critic who wrote and published a famous series of guides to British and Irish restaurants and hotels in the 1950s and 1960s. These guidebooks are credited with raising the quality of British cuisine offered in public eating places. Ronay also championed foreign cuisine for British diners. He insured his influential taste buds for £250,000. (http://en.wikipedia.org/wiki/Egon_Ronay)

Sir Thomas Jones Woodward known by his stage name Tom Jones is a Welsh singer. He became one of the most popular vocalists to emerge from the mid-1960s. Tom Jones had his chest hair insured for £3.5 million in 2008. The geriatric crooner still has the power to make the ladies swoon and apparently considers his luxurious pelt an essential aspect of his sex appeal.

Ornella Muti was born in Rome. She is mostly known to the French for appearing in a television commercial of Giovanni Panzani Pasta. She was voted “The Most Beautiful Woman in the World” in 1994 by a worldwide poll of the magazine “Class”. She regards her breasts as her best asset and has insured them for $350,000.

James Francis “Jimmy” Durante was an American singer pianist, comedian and actor. His distinctive clipped gravelly speech, Comic language butchery, jazz-influenced songs and large nose helped make him one of America’s most familiar and popular personalities of the 1920s through the 1970s. His jokes about his nose included referring to it as a Schnozzola and this word became his nickname. His Schnozzola as he referred to it was insured for $442,000.

Angela Mount has unparalleled experience in the wine retail business. She is widely credited with revolutionising wine on the high street. She has been named as one of the top most influential people in the Wine Industry by The Drinks Business. Angela’s taste buds were famously insured for £10 million by former Somerfield bosses. Somerfield (originally Gateway) was a chain of small to medium-sized supermarkets operating in the United Kingdom.

Kenneth Arthur “Ken” Dodd, OBE, is an English comedian, singer, song-writer and actor. His trademark is his frizzy hair and protruding teeth. At the age of seven, he was dared by his school friends to ride his bike with his eyes shut. He accepted the dare, crashed, and received facial injuries which resulted in his distinctive buck teeth. He insured his trademark buck teeth for £10.6 million. (http://en.wikipedia.org/wiki/Ken_Dodd).

Robyn Rihanna Fenty – a Barbadian recording artist has an estimated net worth of $90 million. She has insured her legs for $1 million. Michael Ryan Flatley is an Irish-American dancer and became internationally known for Irish dance shows Riverdance and Lord of the Dance. In May 1989 Flatley set a Guinness Book world record for tapping speed at 28 taps per second. In 1998 Flatley broke his own record for tapping speed by achieving 35 taps per second, as well as a Guiness Book recognition in both 1999 and 2000 being the highest paid dancer earning $1.6 million per week and having the highest insurance policy on a dancer’s legs of $40 million. (http://en.wikipedia.org/wiki/Michael_Flatley)

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