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GOOOOOOOOAAALL!! 10 things the World Cup revealed about insurance

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I don’t often write about sports because I’m not a particularly big sports fan. I run, but not nearly enough to share my thoughts on it. And I’m pretty active in mixed martial arts, but my thoughts on that tend more toward the inner aspects of my training rather than the physical.

But I do like soccer. Quite a lot, actually. I watch the English Premier League with great enthusiasm, and root for Arsenal, a team I chose because any sports club with a cannon for a logo can’t possibly be all bad. And I love the World Cup. To me, it is the pinnacle of global sport. Forget the Olympics. First off, you can’t watch the entire Olympics, whereas you can watch the entire World Cup. And even if you don’t like soccer, at least it’s a sport you have heard of. With respect to medal-winners in curling, race walking and synchronized swimming, these are sports that just don’t do a whole lot for me.

But the World Cup sure does, and for six glorious weeks every four years, I get to enjoy being part of the in crowd as every other American soccer fan comes out of hiding and is joined by a bandwagon that grows in size every time our national team makes it into the tournament. This year, our team did pretty well, all things considered, and as the country went bonkers over the likes of Clint Dempsey and Tim Howard I thought that there were some lessons we could all learn from the 2014 World Cup, which proved to be a tournament with surprises, outrages, heroism and triumph.

And strangely, it also had a lot to teach the insurance world. Read on.

World cup

Watch your head. 

Head injuries in general, and concussions in particular, are a topic of much discussion in the NFL, with a fairly massive liability lawsuit attached to the problem. This problem is also present in soccer, where players sometimes collide with each other with enough force to knock somebody out. 

In FIFA (the governing body that oversees the World Cup), the rules are that each team gets just three substitutions for an entire game. When you consider that most players run about five or six miles during the course of a game, and often at a sprint, you can see why you might need to take out an exhausted player or two. Managing substitutions is a very important part of the game, and when a player is hurt and must come off the field, away goes a substitution. This has led to more than a few cases of players who have been clearly concussed but they insist on playing, and the coaches let them, putting the players at serious risk of further injury. This happened a few times during the World Cup, but none more prevalent than during the final match, when German player Christoph Kramer was knocked out by a shoulder to the jaw.


Kramer got back up and kept playing, glassy-eyed and discombobulated. A few minutes later, he left the field entirely, and was subbed out. Later, Kramer revealed that after his head injury, he didn’t even know what game he was playing in. This has renewed calls for FIFA to revisit its substitution rule, and to allow for an independent medical expert to evaluate players who have been hurt on the field to determine if they need to come off. Moreover, medical substitutions would not count against a team’s discretionary sub total. This is a great idea, and hopefully we’ll see it in play before the next World Cup.

As for the insurance angle here, plenty of sports leagues are insured on the liability side, down to individual local clubs and school teams. The medical policies of these leagues all bear noting, especially how they handle head injuries. A lot of the injuries we see in soccer are leg, knee and ankle injuries. But head injuries must not be overlooked, and could create substantial liabilities if they are.

The revolution will be televised. 

The 2014 World Cup was hosted by Brazil, a country that has become synonymous with soccer. Brazil is also synonymous with the World Cup itself. The World Cup only got going in the 1930s, and was suspended during World War II, so afterwards, the tournament almost didn’t get going again, since there were few places in war-torn Europe to hold it. Brazil volunteered to host the tournament, and in so doing, really became the birthplace of the World Cup that we know today. It is also the winningest World Cup nation, having won the trophy five times. 

When Brazil won the bid to host the 2014 games, it was a massive win for the nation which is one of the world’s emerging powers. But Brazil still has some fundamental problems it must contend with, such as a deeply uneven economy, with massive poverty and crime in some areas. The day the World Cup was announced to be in Brazil, drug lords in a Rio de Janeiro favela shot down a police helicopter. So clearly, Brazil had some work to do to make sure that when the games kicked off, the hundreds of thousands of world travelers who would come to Brazil would be safe and could be accommodated.

brazil protesters

Easier said than done. Some of the stadiums were never fully finished by the time of the games and, while Brazil poured some $12 billion into the project, there were protests and riots by people who insisted that the government ought to have invested that money on helping the nation’s many impoverished citizens.

The civil unrest became an issue of concern for event organizers and companies supporting the event, such as food distributors. Aramark spoke at the RIMS 2014 Conference in Denver about the challenges it faced supplying food to the games, and its insurance partner, Allianz, did likewise, noting that in Brazil, you absolutely have to have local partners to get things done properly. 

Brazil remains a country with serious crime, poverty and security concerns, and its insurance regime really favors local companies, which makes it difficult to bring outside expertise into the country to help address its many risks. But it’s getting there, proving that as an emerging market, even though it has its own headaches (some of the massive), as an insurance marketplace, it is a terrific opportunity for those firms with the acumen and savvy for doing business on Brazilian terms.

Bet on Lloyd’s. 

Billions of dollars changed hands in wagers over the course of the World Cup, and oddsmakers had the entire thing pegged before the first kickoff. 

One of the most accurate predictors of the tournament’s outcome was not ESPN, or one of the online betting parlors, but Lloyd’s. It shouldn’t come as much of a surprise, really, that the grandfather of the modern insurance industry – a company that was built on mariners and merchants betting in a coffeehouse whose ships would survive an ocean voyage and whose wouldn’t – would be able to figure the odds of who would prevail in soccer’s greatest spectacle. The way Lloyd’s did it was to rank the teams based on their insurability. Now, this has some correlation to performance. Teams such as Germany and Brazil were predicted to go far in the tournament because their teams were stocked with international soccer superstars, who each had a very high insurable value. (These players are great assets for their teams, and you better believe they are insured against the kind of injury that might take them out for a season, or end their career altogether.)

Simply put, the better the players, the higher the insurable value, the higher the Lloyd’s ranking. For the most part, Lloyd’s rankings jived with FIFA world rankings, but not always. And there were some surprises, such as when powerhouses like England, Spain and Italy all failed to make it past the first round, and when giant-killers such as Costa Rica made it all the way to the semifinals. In some cases, the disparity was severe – any one of England’s players had a higher insurable value than the entirety of the Costa Rican team, for example.

But for the most part, Lloyd’s got it right, using little more than raw insurance data. They accurately predicted that the U.S. would make it to the Round of 16 (which for us, was quite an achievement), and that Germany would win the whole thing. In fact, they got the final four – Germany, Brazil, the Netherlands and Argetina – right, as well as accurately pegging how far a bunch of other teams would go.

And that’s the lesson here. The data will set you free. Few industries are as numbers-driven as insurance, and it is always trying to find new ways to use that data to predict the future likelihood and severity of losses. If Lloyd’s showed us anything, it’s that under the right circumstances, that data can be pretty accurate, indeed. Keep that in mind the next time you see an Atlantic storm season projection.


Keep on hating, haters. 

In America, soccer doesn’t just have a small fan base, compared to baseball, basketball, football or hockey, but it’s also got its detractors too. Taking the brass ring for hating on soccer this World Cup was none other than Ann Coulter, who published a column outlining her many reasons for hating soccer including that fact that it’s “foreign,” it’s the kind of thing only liberals would like, and its growing popularity is a sign of America’s moral decay.

Despite this kind of backlash, the real sign of soccer’s growing popularity, and the popularity of the World Cup, is in the money. This year, World Cup fans watched 1.2 billion minutes of advertisements tied to the event. The ad viewership tied to the World Cup is quadruple the ad viewership for the SuperBowl, and more time spent watching World Cup ads than watching every World Cup game in history. Advertisers spent as much on their World Cup social media campaigns alone as they do for a SuperBowl TV spot


The haters can hate all they want, but it won’t change the fact that the really big money is there to be made on the World Cup. The reasons are pretty simple: it is a truly global audience, and a great ad on a platform that defies boundaries, such as YouTube or social media, can get far more bang for the buck than, say, a single TV spot on a single gaming event played in a single country. (Sure, the SuperBowl is watched abroad, but nowhere near like the World Cup is.)

The insurance lesson to be learned here is that it really pays to reach outside of your typical audience. American marketers aren’t always used to reaching a global audience, and when they did, the returns were massive. You might say the same for producers reaching out to the underserved middle market for personal lines, or certain segments of smaller commercial business, but in those cases, the challenge starts with the carrier not providing sufficient incentive for the producer to go and chase that business. But that’s perhaps a discussion for another time. The marketing lesson to be learned here is that massive audiences have massive payouts. There is a reason why so many leading insurers right now are spending an order of magnitude more on ad campaigns that target the retail consumer directly; that’s where the money is and that’s where carriers are making their play. This bodes ill for producers if they can’t be part of the transaction, so now more than ever, it’s important for producers to get to know their clients so well that they would not even think of buying direct. After all, most insurance is a bit more complicated than the policyholder has time for. The worth of the agent or broker is still there, but it’s a case that should always be made, both to the audience you know, and the audience you don’t.

Here comes the giant-killer. 

If Ann Coulter wanted to really get worked up over something at the World Cup, she should have paid attention to how Costa Rica, a tiny socialist nation with no standing army and no major international superstars on it, managed to emerge at the top of its group, blowing by supergiants like England, and making it all the way to the semifinals, losing only after  a penalty shootout with the Netherlands – no slouch of a team.
The insurance lesson to be learned here is the power of smallness. People tend to think of insurance as an industry of massive monolithic companies, but that’s not really true. A great deal of the real power of insurance comes from the smaller operators, the regioanal brokers, the independent agents, and the small-town businesspeople. When we look at Costa Rica’s success in the World Cup, we see how a little guy can run rings around the Goliaths of the world, in part due to grit, in part due to the big guy’s failure to execute, but most of all, in part because the small guy has to innovate if he or she wants to survive. That’s just part of the deal. And just as Costa Rica’s loopy,  unorthdox play completely flummoxed the likes of England, so too can the bold ideas of the smallest insurance practitioner show the way forward for the entire industry. Remember: a crazy idea that works isn’t a crazy idea.

The big guy can lose. 

The 2014 World Cup had no shortage of shocking moments. But when it came to game outcomes, there was no more unbelievable result than the utter humiliation Brazil suffered when it lost 7-1 to Germany in the semifinals. 

In a game where it is not uncommon for both sides to play 90 minutes or more without scoring more than a single goal, that Germany scored 5 goals inside of 18 minutes beggared belief. And against Brazil, of all nations. It is the kind of scoring rout that will be talked about by soccer fans for 100 years. Already it is the kind of thing that when Brazil criticized Israel for its military actions in Gaza, Israel responded, in part, by reminding Brazil of its loss ot Germany.It was the kind of thing that left the Brazilian fans in the stands utterly beside themselves; one camera shot of a weeping Brazilian boy in the stands went viral, as it summed up the heartbreak of an entire nation.

crying in brazil

There is a lot you could do to draw parallels to the destruction of Brazil’s national team to the downfall of some of the insurance world’s most invincible giants. Every time there is an insurance insolvency, there is always the shock of those who wondered how something like this could happen, especially if the company had a decent rating from one of the leading rating agencies. The meltdown of AIG a few years ago, while not an insurance failure at all, still showed how an insurance giant can be brought low by a single, devastating vulnerability. The strange receivership of Executive Life of New York shows that under the right circumstances, an insurer can end up in regulatory limbo. Whether it is a lack of holistic vision, a lack of teamwork, an over-reliance on individual superstars, or just plain arrogance, when a giant falls, it falls harder, because the way down is that much bigger. There is no insurance company out there that is invincible. The best ones know this by heart. Virtually all insurance companies do, really. But there will always be those rare few that fail to manage themselves properly. And when they do, they shall repeat for the insurance world what Brazil did this year before Germany.

A momentary lapse of reason. 

As shocking as Brazil’s defeat to Germany was for fans of the sport of soccer, the most shocking moment of the World Cup had to be one involving Uruguayan forward Luis Suárez, a player who is infamous for a variety of reprhensible behavior on-field including hurling racial epithets, punching other players, and in two cases, biting other players.

Make that three biting incidents. In Uruguay’s elimination game with Italy, Suárez, frustrated by Italy’s defensive play, leaned over and bit the shoulder of Italian defender Giorgio Chiellini. FIFA laid down a fairly severe 9-game suspension, accompanied with a four-month exile from the sport, as well as a hefty fine, knocking Suarez out of the World Cup.

suarez bite

The insurance lesson here is one of reputational risk management, and it’s something any insurer can appreciate. Whether it’s life insurers stinging from the larger reputational issues the public foists upon life settlements or annuity sales, or whether it’s P&C insurers caught with insufficient reserves, insurers are used to carrying the water for the misdeeds of a very small minority of scoundrels and nincompoops. The industry’s collective reputation continues to suffer in the public eye for misdeeds both real and imagined, and it never seems quite fair for a business that delivers billions and billions of dollars in speedy and just payouts to policyholders in need. It is so bad that many insurers just accept their reputational troubles with a shrug, knowing that they will never quite get out from under them.

suarez meme

Wir spielen für Amerika. 

The U.S. national team made headlines before the World Cup even started, when the team’s manager, the legendary German forward Jürgen Klinsmann, announced that Landon Donovan would not make the roster. Donovan, as those who watched the 2010 World Cup might remember, was the U.S. team’s big star, scoring an especially crucial goal during the tournament to keep the U.S. alive. Donovan was seen as a lock for the 2014 team, but the midfielder somehow did not make the cut, which immediately drew a lot of criticism for Klinsmann. To make things worse, Klinsmann also suggested that the U.S. team did not have a good chance of winning the tournament, and that Germany was most likely going to take the trophy. He was right, but that didn’t make too many Americans all that happy, especially before the tournament even got started.

In the end, however, it was native New Jerseyan and goalie Tim Howard who was perhaps the team’s most standout player. Howard’s turn as goalie became the talk of the tournament for a while, and his heroic performance in the U.S.’s final game, a loss against Belgium, set a record for number of successfully defended shots on goal. The GIF below, showing all of Howard’s saves, gives an idea of how hard the guy was working.


The insurance lesson here is one about recruiting and manpower. The U.S. national team faces a difficult task when filling its ranks. We’re just not enough of a soccer country (yet), so we don’t have the level of home-grown talent for a national team like what you might find in much of Western Europe or South America. 

The same is true of the insurance world, especially of its distribution system. The average age of the insurance professional today is around 56, and the average increases by a year every year, which tells you everything you need to know about the demographics of the insurance industry. As Boomers are turning 65 at a rate of some 10,000 a day, the insurance industry is facing a growing manpower shortage the likes of which it has never really seen before. Thankfully, lots of great producers stay in business after 65, but the fact remains that this industry is losing manpower, experience and know-how much faster than it is replacing it. The industry needs to find its new blood, and it needs to find it fast. Does that mean reinstituting a captive agency system? Does that mean getting the word out that this is a strong and stable industry to work in these days? Does that mean getting to understand better what Gen Y wants out of a career and designing opportunities to meet those needs? Yes, yes, and yes.

One superstar does not make a team. 

The World Cup was replete with superstars who are the cock of the walk back on the teams where they play professionally. Others, however, are legends in the making looking to make a name for themselves on soccer’s biggest stage. Colombian forward James Rodríguez falls into this second camp.

James, as he is often called, was the breakout star of the 2014 World Cup. He scored at least once in every single game Colombia played in the tournament, and his skillful, explosive style, coupled with his good looks, made him a huge fan favorite abroad and a national hero to Colombia. At only 23 years old, James is positioned to become the next big thing in soccer, and his six goals made him the top-scoring player of the 2014 World Cup, earning him the coveted Golden Boot award.

Colombia James

But in the end, Colombia fell to Brazil (right before Brazil fell to Germany), despite Rodríguez’s efforts.

The insurance lesson here is that one man, no matter how good, does not make a team. This is especially important for indpendent agents to keep in mind. As good as you are, you can’t do it all by yourself. Or, as good as he or she is, that superstar in your office can’t do it all by themselves, either. There is a very independent, solo aspect to much of the insurance business. But this business is like a Swiss timepiece, and it doesn’t work unless all of the gears fit cleanly together. It rewards individual achievement, but it prizes team results, and to that end, you can see that superstars are great. But they can only get the entire team so far. If it were otherwise, Colombia would have won the World Cup trophy instead of Germany.

Speaking of Germany and the World Cup trophy…

Always get insurance. 

The last lesson from the World Cup is more of a facepalm moment than anything else. So jubilant was the German squad after winning the World Cup that in the raucous celebrations that followed, somebody from the German squad – they won’t say who – accidentally dinged the trophy and knocked a piece off of it. The national team’s spokespeople were quick to point out that it was all going to be okay, as they had specialists who could repair the trophy. Still, it’s a World Cup trophy. you’d think that no matter happy you are to have won it, you wouldn’t, you know…break it.

Germany celebrates

But it’s all good. It turns out, FIFA must know how soccer players party when they’re victorious because they don’t give out the actual trophy. They just give out a replica of it. The real World Cup trophy lives in a safe in Switzerland, where hard-drinking footie stars can’t do terrible things to it.

The insurance lesson here is obvious. Insure everything. EVERYTHING. Even the things you think won’t break or go bad. Even the things you can replace on your own. Even the things that you take really, really good care of. If the German squad proves anything (aside from the fact that they’re really, really good at soccer), it’s that everything needs more protection than we typically afford it. And somehow, somewhere, someway, whatever it is that you hold dear is probably going to get badly screwed up at some point. And when that does, you’ll want the resources in place to make it all better, right?

Right. Play on.



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