Expert Risk Articles
4 Questions for … David Cloward, Global Product Leader Live Entertainment, AGCS
The motorsports industry is fast-moving and fast-growing. As a niche market, half entertainment and half live event, lots can – and does – go wrong, requiring an insurer that understands the perils and pitfalls from starting line to finish line, as David Cloward explains.
1. Allianz has launched a new product in North America - soon to be offered globally - in Motorsports. Describe the business.
Motorsports is among the most popular and fastest growing spectator sports in the United States, with annual motorsports event attendance at almost 20 million. Globally, interest increasingly measures high, with some race events seeing attendance figures of 125,000 or more. Motorsports insurance includes coverage for companies that race conveyances such as automobiles and boats, including the industry associations, track venues, competitive teams and events, sponsors and vendors, as well as other businesses that support or are involved in the motorsports industry.
2. What different kinds of risks are included under the "motorsports insurance" banner?
At AGCS, we focus on providing coverage for racing facilities, events, race teams and the sanctioning bodies or racing associations that govern the sport. Racing facility risks cover clients that own or lease a track or venue where a range of annual motorsports activities may be held, such as oval tracks, super speedways or road racecourses. Event exposures are those risks that occur at various leased or rented facilities, such as ride and drive events where the auto industry introduces new models, features or options, racing schools and racing clubs and associations. Race team exposures are businesses or in some cases a collection of private individuals who come together to compete in motorsports events. And sanctioning bodies or racing association exposures are risks by entities that provide rules and regulations to member tracks, ensuring safety precautions and setting track rules for teams to follow.
3. Where do you see the most natural growth areas to be for this product in the future?
There is significant opportunity for growth as we have only touched the surface of the industry volume in North America. Current efforts are directed toward permanent facilities and team operations. With permanent race facilities the natural growth will continue in short oval track and road course facilities, with continued efforts on driving schools, ride and drive happenings and other events held at these type of facilities. With race teams, we focus on anything from weekly racers to the extremely popular National Association for Stock Car Auto Racing (NASCAR) Cup series. There are over 50,000 race teams annually involved in motorsports. Although our program was announced late last year, we missed the window of time when teams traditionally shop for their insurance needs, so we expect significant growth throughout the fall and winter –before the racing season begins to “rev” up. In addition to growth in North America, we are excited to grow our business outside of North America. Allianz has a rich history in support of the motorsport industry and we look to build upon our relationships abroad to deliver what we believe will be a comprehensive and quality product offering.
4. How is the motorsports industry changing? What are some exciting new trends?
Considerable change has occurred in the motorsports industry during the past 30 years. At one time, the industry was a gentlemen’s industry with minimal spectator viewing. Now, spectator attendance at motorsports events continues to break records. For example, the Indianapolis 500 automobile race recently broke a record for the highest single day spectator event in the history of any sports venue – at over 360,000, or about 1 out of every thousand people in the US. Industry changes continue to raise the safety awareness of activities. In the past, changes such as the introduction of barrier systems to meet the demands of increasing vehicle speeds, heightened and strengthened debris fencing to increase safe event viewing, and the introduction of driver safety apparel like helmets, fire resistant suits, shoes and gloves and improvements in roll cages and cockpit protection in the vehicles have all directly impacted the safety of the industry.
Emerging trends include road course resorts, which are new facilities that will cater to members who purchase an annual membership and are allowed on the track at scheduled times. As with golf clubs, these facilities include a lounge and track time per scheduled days. Another trend is making these events entertaining for the spectators by incorporating musical concerts, food/ merchandise vendors and family activities into the race events. The industry has shifted from being just a sporting event to a multi-day festival destination for the entire family.