To The Editor:
I read the article, “Baseball Star Coverage Harder To Come By,” in the Oct. 29 National Underwriter and have to say that the information presented was not completely accurate. Yes, it is harder to come by in terms of the sum insured amounts. It boils down to a true supply and demand issue, however, capped off by significant situations.
The need for higher sums insured has been increasing dramatically over the last few years as it becomes more common to have more and more guaranteed sports contracts worth over $100 million. The events of 9/11/01 added to the pressure of the demand for this coverage.
Pre-9/11,capacity amounts for this type of coverage had been shrinking, forcing price pressure on the unit cost per thousand to increase.
The issues faced today have nothing to do with smaller companies getting into the business simply to make a buck. We all know that baseball teams are run by successful men and women. The comments made in the article–”The insurance is available; it just costs more these days. The result is that many of these new, smaller companies that got into insuring professional athletes because of the glamour of the industry might not be around when spring training begins again in February,”–has absolutely nothing to do with why the insurance coverage is harder to come by.
It is a series of significant events–higher contract values, coupled with significant losses in sports capped off by the recent attacks on America–that has resulted in why coverage for these risks is harder to come by.
We are a specialized firm that is positioned to understand and really see what has caused the harder market for sports insurance. In fact, in Lloyds of London’s 350-year history, The Hanleigh Companies is the first American firm to be directly admitted to the London market (2001). What this means is that we have the ability to really see what pressures are and where they are coming from.
The article addressed a significant issue and one worth reporting, but because of some of the inaccurate statements, I felt compelled to write this response.
Glenn B Dorr III
The Hanleigh Companies
Reproduced from National Underwriter Life & Health/Financial Services Edition, November 12, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.