This archive report was first published on 13 July 2021.
Organisers of the Tokyo Olympics are facing a significant financial hit due to the ban on spectators, with insurance sources suggesting that the local committee may not receive substantial payouts.
The ban on spectators was announced last week, with the Olympics set to take place without fans in the host city. However, some events outside of Tokyo will still have spectators.
Industry sources estimate that the Tokyo committee has taken out an event cancellation policy worth between $500-800 million, but much of this may have already been used up in a claim for postponement costs last year.
"Unless there's any limit left, I think it likely this would be an uninsured loss," said Duncan Fraser, global practice leader, sport and entertainment, at broker Howden.
The International Olympic Committee (IOC) is also likely to face losses due to the disruption from the spectator ban, with the IOC taking out around $800 million of protection for each Summer Games.
Reinsurers, which insure the insurers, are likely to face the bulk of any claims, with Fitch estimating that they may face a bill of $300-400 million due to the spectator ban.
