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Fantasy football makes its way into insurance biz

August 18, 2014

Is this a new business opportunity for insurers?


Did you know that Fantasy Football participants can buy real insurance that provides coverage when players on their teams have season-ending injuries? … Let that sink in for a second.

Fans across the nation rejoice!

As with real football, injuries to top players can have a devastating impact on the season. And with the September 4 draft deadline quickly approaching, this could become a game changer.

The 33 million people engaged every year know what I’m talking about. According to an article by Leighton Hunley from Risk & Insurance, they already spend between $100 and $10,000 (for some league owners) in the $2 billion industry. So, if 10 percent of the 33 million players are willing to pay a $20 annual premium to insure a single player, that’s a $66 million insurance product each season.

“While this figure currently would still be a fraction of premium levels for other niche property and casualty products, if priced right, and if growth in fantasy sports continues, the size of the market would be difficult to ignore,” Hunley writes. “This market potential should likely entice more insurers to enter into the business.”

What Does It Cover?

Fantasy sports insurance is an online product. One product offering for the upcoming 2014 season appears to be available: FantasyPlayerProtect (FPP).

FPP is designed to recover costs for owners whose players experience season-ruining injuries. FPP’s policies define this condition in terms of the number of games missed, according to a Wall Street Journal article by Nando Di Fino. According to the article, the coverage is triggered when a player misses eight or more games of a 14- or 15-week season, and nine or more games of a 16- or 17-week schedule.

The coverage is intended to replace the league entry fee, plus research expenses such as magazine or online subscriptions, according to Di Fino. FPP’s coverage maximum is $1,000, including up to $250 for ancillary research expenses.

Owners can insure as many as five players per fantasy team and 10 players per season with FPP. The premium per player insured ranges from 9 percent — for a historically healthy player — to 13 percent for an injury-prone player — of the coverage amount, plus taxes and fees.

With this product expected to gain traction if interest in Fantasy Football continues to increase, could you see this becoming a major product in the insurance industry?

The information in this publication was compiled from sources believed to be reliable for informational purposes only. All sample policies and procedures herein should serve as a guideline, which you can use to create your own policies and procedures. We trust that you will customize these samples to reflect your own operations and believe that these samples may serve as a helpful platform for this endeavor. Any and all information contained herein is not intended to constitute advice (particularly not legal advice). Accordingly, persons requiring advice should consult independent advisors when developing programs and policies. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication and sample policies and procedures, including any information, methods or safety suggestions contained herein. We undertake no obligation to publicly update or revise any of this information, whether to reflect new information, future developments, events or circumstances or otherwise. Moreover, Zurich reminds you that this cannot be assumed to contain every acceptable safety and compliance procedure or that additional procedures might not be appropriate under the circumstances. The subject matter of this publication is not tied to any specific insurance product nor will adopting these policies and procedures ensure coverage under any insurance policy.

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