This summer’s Olympics may have to be delayed

This summer’s Olympics may have to be delayed, Japan has hinted. A cancellation of the contest cannot be ruled out, despite reassuring noises from the International Olympic Committee. The global sports extravaganza is just the most visible of thousands of events imperilled by the coronavirus. These could cost insurers dearly. Payouts if the Tokyo Olympics are cancelled will exceed $2 billion… Even the better case scenario of a delay rather than a cancellation offers little relief… So far, the region’s biggest insurance companies, such as Hong Kong-listed AIA and Shanghai-listed China Life, have held up well. They do not have exposure to the Olympics. Having suffered large losses during the 2003 Sars epidemic, many have since changed cover to exclude losses from epidemics… Even so, Asia’s insurance sector is exposed to an unprecedented level of claims for event cancellations and business interruption… Regional insurers have benefited from years of calm across much of Asia. Shares of AIA have gained more than 200 per cent in the past decade… The stock trades at a lofty 17 times forward earnings, a premium of more than a third to global peers. The markets underestimate the damage coronavirus could do to Asian insurance stocks.

Lex. 

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