1 month ago
The reasons for the jump in the sum assured, industry experts said, vary from risks and uncertainty during matches to player injuries and other issues.
The Indian Premier League (IPL), the world’s biggest twenty-20 cricket league, will hold its first match on March 22.
As the popularity of the league continues to grow, so has the sum assured in its insurance.
Indeed, the sum assured for insurance taken by the Board of Control for Cricket in India (BCCI), the authority managing the IPL, and teams in the league, has been increasing over the last few years.
But why do the BCCI and IPL teams need insurance? And how does insurance work in this format?
Let's take a look.
How does insurance work in the IPL?
League teams and the BCCI insure players, matches and venues. For example, a team will secure medical or general insurance for its players for a particular season. In the BCCI's case, the insurance is for a venue where a match is scheduled.
For example, in a report during IPL 2018, Alliance Insurance Brokers, an insurance service provider, said that state-run general insurer New India Assurance had underwritten a majority of the injured player policies for various IPL franchisees. "It is providing insurance cover for
players, the Board of Control for Cricket in India (BCCI) and the sponsors. ICICI Lombard is the lead insurer for the broadcaster Star India. Alliance Insurance Brokers has worked on the policies for the broadcaster, the BCCI’s loss of fee and for some franchisees," the insurer said in the report.
The reasons for the jump in the sum assured, industry experts said, vary from risks and uncertainty during matches to player injuries and other issues.
"Most of this insurance is filed for matches and venues. In case any matches are abandoned, the sum assured is delivered to the respective teams, " said Avinash Singh, Senior Research Analyst, Emkay Global Financial Services.
LC Gupta, Chief Financial Officer of Punjab Kings owner KPH Dream Cricket, said that players are also eligible to receive 50 percent of their fee if they are injured.
Insurance covers such eventualities.
"Insurance is also taken for loss of revenue due to washouts and tournament matches being cancelled. Players also get medical and accident insurance. These are also taken as part of the normal business of the franchise," Gupta said.
Why has the sum assured surged?
Experts said that due to more awareness about the risks involved in the league, the sum assured has been rising. For example, the jump from Rs 230 crore in 2018 to Rs 4,000 crore in 2021 was due to the pandemic, when the tournament faced challenges, experts said.
“Teams and others have started to go for per-match insurance in a big way after the issues faced during the pandemic,” said Singh.
This year, industry experts attributed the rise in insurance to reasons such as coverage against any unforeseen revenue loss and uncertainty during the games, since 2024 is an election year.
Have there been any claims by teams or players?
In the 2021 IPL season, Indian cricketer Shreyas Iyer was injured midway through the league and was rested from subsequent matches. Thanks to player insurance, Iyer was paid his entire fee of Rs 7 crore for the league by Delhi Capitals.
Are there special insurance schemes for the league?
Industry experts said that most of the insurance taken under the IPL falls under the general insurance category. “There is no different or customised insurance for the teams or the BCCI. These are generally curated under the general insurance segment,” said Singh.
