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.
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.
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.