During the Paris 2024 Olympics insurers were on high alert over potential risks that could lead to event cancellations and significant insurance losses. Key concerns included the threat of terrorist attacks and the disruptive potential of fake AI-generated images.
The Paris Games, which hold from July 26 and run through Aug. 11, were taking place at a time of heightened risk, with political tensions globally and locally providing fuel for disruptive events ranging from terrorist attacks to mass protests. The insurance market is heavily involved in insuring the Games.
Everyone involved in the Games, from the International Olympic Committee (IOC) to local organizers and hotels, have been bought cover for lost earnings if the event is canceled.
The Olympic Games would carry “one of the largest” event cancellation policies in the world, if not the largest.
Financial stakes are significant, with the IOC typically securing around $800 mn in insurance coverage for each Olympic Games well in advance.
But it would take a serious incident, such as the whole of Paris being locked down for the duration of the Games, to cause a big problem for the industry. Given the duration of the Games and the varying locations of the events, the chance of one small, isolated incident causing major disruption is minimal.
Terrorist attacks are high on the list of worries. In May, French authorities charged a man with plotting to attack spectators attending soccer games on behalf of Islamic State, and in July arrested an alleged neo-Nazi sympathizer for planning attacks on the Games. Islamist terrorism was his force’s main concern.
Cyberattacks also feature prominently on the list of concerns as the greater sophistication of tools available to perpetrators, growing use of technology at events, increasing triggers and the amount of attention paid to the games Games coincide.
The Olympics has its own broadcasting network, for example, which would be a prime target for hackers to disrupt it either to make a point, or to charge a ransom.
The 2020 Tokyo Olympics, postponed due to COVID-19, serve as a cautionary example for insurers. While standard event cancellation policies often exclude terror attacks, specific coverage can address these risks.
Insurers could have faced claims of $2 bn to $3 bn if the 2020 Summer Olympics in Tokyo had been canceled because of the COVID-19 pandemic.
While the Games were postponed, they did go ahead in 2021, sparing the industry from paying out in full.
The geopolitical climate has raised alarms for insurers, particularly with ongoing conflicts and recent terrorist threats in Europe.
But International Olympic Committee, Paris 2024 and the national organising committees, together with the French authorities, have taken the right steps when it comes to challenges on the ground.
The IOC’s risk management strategies address these risks, though specific insurance terms are confidential.
Insurance complexities increase with the involvement of stakeholders like national organizing committees, broadcasters, sponsors, and hospitality providers, each requiring tailored coverage.
Beyond physical threats, insurers feared of digital disruptions. AI-driven attacks could target various aspects of the Olympic Games, such as ticketing, fraud, or live broadcast manipulation.
The potential for protests and civil unrest, particularly around France’s parliamentary elections, further complicates the risk landscape.
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