SBJ/April 8-14, 2013/In Depth

Runners have more insurance options should they have to back out of an event

Insurance policies that cover a participant’s entry fee are becoming en vogue in the endurance sports industry.

The Active Network, Competitor Group and USA Triathlon recently partnered with insurance companies to offer policies that refund a participant’s entry fee in case they miss an event because of injury, travel delays or other conflicts.

Active Network is the largest online registration and event management company in endurance sports and handles registration for nearly 50,000 events worldwide. The Competitor Group owns the Rock ’n’ Roll Marathon series of running events and the TriRock Triathlon Series. USA Triathlon is the national governing body of triathlon in the United States.

On average, 15 to 20 percent of all registrants do not participate in their respective race due to conflicts. Traditionally, participants were unable to earn a refund in the case of those circumstances. The Active Network’s partnership with Allianz Global Assistance, and Competitor Group’s and USA Triathlon’s deals with TransAmerica, however, have changed that.

“It’s about giving them peace of mind,” said Eric McCue, vice president and general manager of sports for the Active Network. “You can go into the registration process confidently knowing you have a contingency plan with this policy.”
The insurance policies typically cost a flat fee of $7 to $9 that is added to the runner’s registration fee.

Ed Walker, TransAmerica’s chief strategy officer, life and protection division, said the race insurance policies are similar in structure and risk to travel insurance. Walker, an experienced triathlete, said he approached Competitor Group about the partnership because the company’s 26 Rock ’n’ Roll running races and hundreds of thousands of annual participants provided the scale required for the business. As part of Competitor’s insurance policy, participants can transfer their entry into another race of similar distance.

“It’s not a high risk in terms of severity, but the frequency could be high,” Walker said. The insurance does not refund participants in the case of event cancellation, such as the 2012 ING New York City Marathon, which was canceled in the wake of Hurricane Sandy. Walker said that type of insurance is still not favorable for insurance companies.

“In event insurance you have low frequency but you could have catastrophic risk,” he said. “That type of product has a high concentration of risk.”

Mary Wittenberg, CEO of the New York Road Runners, said the organization is investigating insurance policies that would give refunds to runners in the case of an event cancellation. In 2012, the NYRR had insurance through Lloyd’s of London, which paid an undisclosed amount after several weeks of negotiations. The payment did not allow the race to deliver registration refunds, however.

“There are plenty of big insurance companies that will take that risk, but there are always exceptions to insurance policies, so how do you protect an organization should a cancellation result from an exception?” Wittenberg said. “Those are the things we’re looking at.”

Fred Dreier is a writer in New York City.

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