Taylor Swift cancels hit-and-run deal for insurers: Sources

(Reuters) – Insurers face millions of dollars in damages after a foiled attack forced the cancellation of three Taylor Swift concerts in Austria, although several suppliers will share the hit, two people involved in insuring her tour told Reuters.

Concerts in Vienna were canceled this week after a planned attack on the Ernst Happel stadium. Around 195,000 ‘Swifties’ were expected to attend, with many traveling from overseas to see the pop superstar.

Barracuda Music, the concert organizer, said all tickets would be refunded within 10 days. He could not immediately be reached for comment on the insurance arrangements.

Ms. Swift is popular with insurers because she rarely cancels concerts, a third insurance source said. Her celebrity and success means most London event cancellation insurers would be involved in covering her tour, one of the sources said. The sources declined to be named, citing client confidentiality.

Organizers of large sporting and entertainment events typically purchase event cancellation insurance, much of which tends to be underwritten through the Lloyd’s of London market by a consortium of insurers.

A spokesman for Lloyd’s of London confirmed that event cancellation insurance is offered at Lloyd’s, but said he could not comment on specific policies.

Militant attacks are often excluded from event cancellation policies, but policyholders usually buy additional cover against them or the threat of them. “The stand-alone terrorism cancellation insurance policy would have been triggered by the terrorist act or threat clause in the policy because there was a known potential terrorist event,” said Tim Thornhill, managing director at broker Tysers.

Reuters could not determine the extent of coverage of the concerts. Marcos Alvarez, managing director of global financial institution ratings at Morningstar DBRS, said losses from the write-offs could be in the tens of millions of dollars.

Mr. Alvarez said insurance losses could be limited by the fact that concerts could be rescheduled.

The cover has been structured so that insurers are not in a crunch for a complete cancellation of the tournament, said Andrew Colcomb, head of union research at Argenta Private Capital, based on his analysis.

Ms. Swift’s Eras tour is expected to generate nearly $2 billion in ticket sales.

Event cancellation insurance usually also covers delay, moving the event to another location, venue rent, artist payment and tickets.

Policies can be taken out by local or international organizers, and artists can add their own policies to ensure they are paid for the event if it is cancelled, industry sources say. The stadium would typically have event cancellation insurance, said Loretta Worters, vice president of media relations at the U.S. Insurance Information Institute.

“Assuming this is an isolated event, we believe most insurers will remain comfortable with their exposure to cancellation insurance products,” Mr Alvarez said.

He further added: “Insurers may limit the cover available for terrorism cancellation insurance given the rising political tensions around the world.”

Leigh Ann Rossi, senior vice president, sports and entertainment group at broker NFP Corp., also said she doesn’t think “this one-time gig claim is going to move the needle in the market.”

She added, however, that “if this becomes a pattern or if something happens in Paris at the Olympics, it could impact the market.”

British police said on Thursday there was nothing to suggest the planned attack would have any impact on Ms Swift’s return next week to London’s Wembley Stadium for her final five shows in Europe.

Any additional concert security would “create a significant challenge” for police, said Rich Phillips, head of crisis, resilience and reputation consulting at insurance broker Marsh LLC, especially as officials are on high alert after days of unrest in Britain involving attacks targeting Muslims and migrants.