Home Insurance AGCS spotlights dangers within the leisure trade

AGCS spotlights dangers within the leisure trade

AGCS spotlights dangers within the leisure trade

“The leisure trade had a really constructive yr in 2022 and a welcome restoration is certainly underway, however we aren’t out of the woods but,” mentioned Michael Furtschegger, international head of leisure at AGCS. “Within the three years because the coronavirus first hit the headlines, the world has modified. The sector should proceed to evolve according to new applied sciences, proliferating platforms, and seismic shifts in patterns of consumption, in addition to adjustments within the public temper, significantly amongst youthful generations.”

Regardless of the challenges confronted by the trade, customers are returning to their most well-liked leisure venues or platforms, AGCS mentioned. International field workplace receipts reached $25.9 billion final yr, a 27% rise from 2021, in keeping with Gower Road Analytics. Nevertheless, that quantity continues to be 35% beneath the typical for the three years earlier than the pandemic.

Reside music income is anticipated to surpass pre-pandemic ranges subsequent yr, with digital music streaming subscriptions driving progress in recorded music, the place revenues are predicted to succeed in $45.6 billion in 2026, up from $36.1 billion in 2021.

Reside theater can be seeing a comeback, with rising receipts and attendance. The worldwide sports activities trade can be proving resilient, supported by media rights, sponsorship offers, and a calendar of worldwide occasions and tournaments, AGCS mentioned.

Challenges stay

Nevertheless, the leisure trade just isn’t resistant to financial traits similar to employees shortages and rising prices, AGCS mentioned.

“Our leisure purchasers are feeling the consequences of inflation, with elevated manufacturing and live-event prices,” Furtschegger mentioned. “Staffing prices have risen following the abilities scarcity that occurred within the wake of the pandemic, when many left the trade. Venues are scarcer than they had been as a result of there are nonetheless many exhibits postponed from the pandemic that have to happen along with new occasions and festivals. Larger occasions could also be thriving, however smaller occasions are extra challenged by elements similar to venue, transportation, and vitality prices. We anticipate to see extra consolidation within the trade, with smaller, struggling manufacturing firms and venues being purchased by bigger operators.”

High quality not amount

Expertise has lowered entry boundaries for content material creators, with virtually anybody capable of add content material to TikTok or YouTube. In the meantime, the main studios and tech companies are launching their very own platforms. The amount of content material now being distributed makes high quality a key differentiator in a crowded market, AGCS mentioned.

“We see a transfer in the direction of high quality in movie manufacturing, however this doesn’t come low-cost,” mentioned Wanda Phillips, head of North American leisure insurance coverage at AGCS. “Companies have to know they’ve adequate insurance coverage cowl for stylish productions. The place prices improve, so, too, do exposures as a result of the prices are greater with every day of taking pictures, and this might be mirrored in any insurance coverage loss.

Sustainability considerations

Environmental, social and governance points are having a rising affect on the leisure sector, AGCS mentioned.

This yr’s Oscars ceremony will function inexperienced attire on the Crimson Carpet because the Academy encourages a extra sustainable strategy to awards style. In dwell occasions, the British band Coldplay has promised to halve the carbon emissions related to its present world tour, in comparison with 2016-2017, and has made an array of sustainable commitments, together with paying a surcharge for aviation gasoline, sourcing moral and sustainable merchandise, and planting a tree for each ticket offered.

Learn subsequent: AGCS faucets product lead for dwell occasions

“Youthful generations are significantly involved about sustainability, and competition organizers are responding to this,” Furtschegger mentioned. “Increasingly leisure organizations are committing themselves to sustainability targets to scale back the emissions related to dwell excursions.”

Digital future

With streaming now a elementary a part of the leisure and media sector, digital conferences are a specific progress space, AGCS mentioned. The worldwide digital occasions market was valued at greater than $114 billion in 2021 and is anticipated to develop at a compound annual progress charge of 21.4% between 2022 and 2030.

Even and not using a dwell viewers, digital occasions nonetheless face dangers, together with transmission failure on account of climate or pure disaster, fireplace affecting the published unit, or community points impacting broadcasting infrastructure. Rented tools and studio house may also be prone to property and casualty liabilities.

Digital actuality is the fastest-growing leisure and media phase, with international progress between 2021 and 2026 predicted to carry the phase to $7.6 billion. Gaming is forecast to account for 85% of complete VR income by 2026.

“Because the worlds of gaming, music and leisure proceed to converge, gaming platforms similar to Fortnite and Roblox are more and more serving as leisure and social hubs, whereas gaming content material is crossing over to social media and streaming platforms,” Furtschegger mentioned.

Rising dangers

Well being and security protocols, rising climate hazards and crowd security are a few of the high danger considerations the leisure sector ought to monitor, AGCS mentioned.

“The COVID disaster and the current tragic taking pictures incident on a movie set have proven that the trade wants to stay vigilant about well being and security protocols,” Furtschegger mentioned.

Local weather change is one other trigger for concern.

“We’re seeing extra irregular weather-related occasions – heavy storms and flooding in Europe and brushfires in California, for instance,” Furtscchegger mentioned. “These inevitably trigger havoc for dwell occasions, each by way of cancellation publicity but in addition damages and human security.”

“Crowds have all the time carried inherent dangers,” mentioned Kurt Miner, managing director of leisure at Allianz Danger Consulting, North America. “Occasion organizers are actually higher capable of monitor giant teams of individuals and hold them protected, in addition to artists, with the usage of real-time video monitoring. Security consultants can remotely monitor two or three occasions, which may every be happening over 15 acres or extra, recognizing danger considerations similar to blocked exits or broken boundaries. They will additionally monitor social media to pre-empt gate-rushing and stop stampedes, sending a safety contingent to the situation earlier than the state of affairs will get out of hand.”

Slips and falls are the most typical reason behind claims from live-event insurance policies, so organizers ought to ensure that medical employees and transport to native medical services are on-site, AGCS mentioned.

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