In good preparation time for the Qatar FIFA World Cup, Audrey Weir, chief risk officer at Dubai-based AIG – central region, takes a look at insurance risk implications for some of the world’s most major sporting events.

It perhaps goes without saying that hosting a major sporting event takes many years of planning. The events themselves become larger scale and more ambitious, and risk management conducted behind the scenes can and does play an important part in ensuring these projects are delivered on time, within budget, without incident – and to showcase the sport in the best possible light.

Particular types of large-scale event pose their own particular challenges. Whereas a national golf or tennis tournament can generally be run within the confines of existing facilities, major international games such as the Olympics and Qatar’s forthcoming FIFA World Cup tournament require the extensive development of new facilities and infrastructure – often spanning across significant distances and more than one city.

WORDS /Audrey Weir

The recent London Olympics is a case in point. Many team and outdoor events, such as soccer, canoe slalom, rowing, mountain biking and sailing, far from being restricted to the UK capital, were held at various locations across the length and breadth of the country.

Similarly, the Qatar FIFA World Cup involves a reported $100 billion infrastructure expenditure – the building of purpose-built stadiums, new road systems, Qatar Metro and wider rail network, a myriad of hotel projects and an entire new city – the huge-scale Lusail project, coined as home of the FIFA World Cup.

For this and other such large-scale events, there are a number of risk hotspots that planners need to address:

The need for early risk management 

Returning to the recent London Olympics, risk management was a very early focus, combining the then interim Olympic Delivery Authority, London Development Agency, project managers and service providers.

As the main London ‘urban brownfield’ site was developed in close proximity to existing underground (metro) stations, the project timeline was immediately delayed by possible unknown entities and unexpected surprises, such as areas of archeological significance, In this respect, effective risk management was required from the very beginning of the development process.

Qatar University Stadium

The Doha Port Stadium

“Hosting large-scale events, and managing the huge number of visitors they attract, puts enormous stresses on existing infrastructure such as border control, transport and accommodation. Hence all infrastructure parties are key stakeholders and an integrated plan needs to be developed between them.”

Security arrangements and time/cost overrun risks

The lead up to large-scale events, and staging of the games themselves, draw a huge number of visitors. Security arrangements are paramount and involve several parties that include governments, security forces, independent transport providers, the Olympics Committee and many other entities. By virtue of being events open on a large scale for the attendance of visitors from every corner of the world, ensuring security for visiting athletes and spectators is an essential, and at the same time difficult task.

As both the FIFA World Cup and Olympics have very specific dates that cannot be moved, assessing the risks that could result in delivery time issues is vitally important.

Similarly budgets will have been created at a very early stage in the process, and diligent management is required to mitigate the risk of additional unplanned financing.

Tracking schedule and cost risk can assist in the understanding of risk factors, and the required management strategy to address these.

Existing infrastructure development and stakeholder engagement

Hosting large-scale events, and managing the huge number of visitors they attract, puts enormous stresses on existing infrastructure such as border control, transport and accommodation. Hence all infrastructure parties are key stakeholders and an integrated plan needs to be developed between them.

This coordinated approach can be seen in Qatar with the establishment of the Qatar 2002 Supreme Committee – a dedicated entity established with the remit to deliver the successful execution of the FIFA World Cup. The Supreme Committee has been tasked with ‘direct responsibility’ for building competition venues, including the proposed stadiums and training sites. It is also tasked with maintaining coordination for non-competition venues required by FIFA in addition to major infrastructure works, such as the New Doha International Airport and proposed nationwide metro network.

In turn, the Supreme Committee has engaged CH2M Hill to assist with this task. CH2M HILL is considered a leading programme and environmental management company, providing management services in the sports, energy, water, transport, urban, environmental, nuclear and industrial sectors. In terms of sport, these include six Olympic Games and one Commonwealth Games over the past 15 years. Most recently it was involved in the London 2012 Olympic and Paralympic Games.

Lusail City

Qatar Metro

Event legacy

From the earliest point of planning, it was decided that the many of the London events at the recent UK Olympics would be held at Stratford, one of the city’s most neglected East London suburbs and a former industrial area. The longer-term plans to regenerate the Stratford area include improvements in transport networks and the longer term use of the Olympic Park.

Closer to home, both Bahrain and Abu Dhabi successfully built huge road infrastructure around their Formula 1 circuits to draw visitors and ease traffic issues. In Abu Dhabi’s case, this also involved creating the multi-faceted Yas Island, which along with the track itself involves hotels, theme parks and other visitor-drawing attractions.

Similar opportunities are presented for Qatar which, as highly publicised recently, has aligned its own ambitious infrastructure, travel, and tourism development plans towards the 2022 World Cup, and the diversification strategy as outlined within its overall National Vision 2030.

Mentioned earlier, as well as the building of purpose-built stadiums and hotel projects for the event itself, there will be extensive new road systems, Qatar Metro and wider rail network, and the huge-scale creation of a whole new ‘city’ – Lusail.

In terms of media coverage and putting Qatar on the global map, as FIFA reports, “The 2010 FIFA World Cup South Africa was shown in every single country and territory on Earth, including Antarctica and the Arctic Circle, generating record-breaking viewing figures in many TV markets around the world. The in-home television coverage of the competition reached over 3.2 billion people around the world, or 46.4 percent of the global population, based on viewers watching a minimum of over one minute of coverage. This represents an eight percent rise on the number of viewers recorded during the 2006 FIFA World Cup Germany.”

“Qatar has aligned its own ambitious infrastructure, travel, and tourism development plans towards the 2022 World Cup, and the diversification strategy as outlined within its overall National Vision 2030.”

Insurance implications

The various aspects of a project life cycle need to be addressed insurance-wise in their own particular circumstance.

Insurance, in a sports scenario, plays a part in responding to identified risks, logistical, financial or otherwise – yet like any other insurance situation needs to applied with relevance to the case in point.

There is no doubt that sports clients, particularly on large-scale events, seek a well-designed insurance programme, designed by reputable and strong insurers that have a focused, practical and effective approach towards risk management.

Each phase of every sports project has its own particular risks, potential impacts and interfaces which run through the numerous stages from construction to commissioning, onto the operational phase that also brings its own unique challenges.