Ticketing Insurance Provides Protection to Football Fans

Ticketing Insurance Provides Protection to Football Fans

Since the omicron variety was identified in late November, the sports calendar has been in turmoil. Hundreds of college sporting events have been canceled, including five bowl games, while hundreds of professional contests have been postponed. Many fans are apprehensive of purchasing tickets for an event well in advance due to the uncertainty, which is compounded by the worry brought on by living through a pandemic for the past two years. Many sports teams in the United Kingdom (EPL and Championship League clubs) provide refund protection or ticketing insurance to ease client concerns. However, their American counterparts, including On Location, who sold the majority of Super Bowl LVI ticket packages, have mostly not followed suit. With “the way the world is moving,” Paul Caine (president, On Location) expects things will change in the months ahead. “In terms of the industry, this is unquestionably going to become something that more companies will want to offer their clients,” he said.

We’re not talking about event cancellation insurance, to be clear. Sports teams and event promoters have long been able to protect themselves against income losses (or expenses incurred as a result of) unforeseen events. We’re talking about refund protection or ticketing insurance, which covers a single ticket holder if they are unable to attend as planned, and is a relatively new service. Over the previous three years, demand for the products has been “growing” worldwide, according to Simon Mabb (CEO, Booking Protect), driving more and more teams to provide it at checkout.

Previously, ticket holders who were unable to attend an event attempted to sell their seats on the secondary market. While this is still an option, “your odds of being able to re-sell those tickets or do something with them are quite unusual and [you are likely] to lose a lot of money,” Mabb said. (It’s worth noting that some credit cards provide additional protection.) Of course, last-minute jitters are more common than ever before (flight cancellations, positive COVID tests).

Even the best-laid plans can be thwarted, as fans have learned. It’s no surprise, then, that individuals who have the choice to acquire reasonable refund protection or tickets insurance plans (6 percent – 8% of total transaction price) will take advantage of it. “Really high conversion [rates] on the product [it sells]–up in the 30 percent -plus [range],” Mabb remarked. According to Dave Wakeman (principal, Wakeman Consulting Group), that figure is “double or more” than it was before the pandemic began.

Mabb had no idea what percentage of insurance policyholders had filed a claim in the previous eight weeks. Since the emergence of omicron, he claims there has been “a record amount of refund [requests] going through the door.”

While fans purchasing pricey seats, hospitality packages, and experiences to high-profile events are more inclined to acquire insurance, Mabb stated that “with so much uncertainty,” “lower [value] transactions have picked up good levels of conversion [as well].” (Consider the person who pays $25 for three tickets to a single regular season game).

Season and partial-season ticket deals are also being insured by fans. It’s easy to envisage a situation in which a fan couldn’t make it to a couple of games during a long home schedule.

Because refund protection and ticketing insurance products must be marketed as part of the initial ticket purchase, the team or venue selling the tickets must embrace the product(s) before its supporters can utilize them. While these rules are still uncommon in the United States, it’s a reasonable bet that they’ll become more common in the future, given our new normal and the fact that there’s minimal risk for the team, venue, or corporation that offers them. According to Mabb, the policies “give buyers confidence” when purchasing tickets and assist drive sales.

They can also be considered as a new source of income. “It is not the club paying the money back [on a claim], as Mabb indicated.” It is we who are repaying the funds on their behalf. So [the team] still has the money from the [original] ticket [sale], their consumer has their money back, and they can now [use] that money to repurchase another ticket for a different game.”

Offering risk protection should also benefit teams in terms of customer service. It’s difficult to picture a team telling a devoted season ticket holder that they’re out of luck and won’t be reimbursed for missed games due to COVID-19 protocols (nor do teams want to refund those tickets out of pocket). For what it’s worth, Chris Barney, the Utah Jazz’s chief revenue officer, stated that few, if any, season ticket holders have requested refunds as a result of a positive COVID test.

It’s unclear why professional sports clubs in the United States have been sluggish to implement refund protection or tickets insurance as a fan benefit (beyond the lack of apparent consumer demand). Some businesses, according to Mabb, may be hesitant about adding more steps or alternatives to the checkout process. Wakeman believes that the American leagues are simply less imaginative than their European equivalents because there is less pressure to sell tickets in the United States (see: TV deals, consolidation deals with the secondary market, and corporate sponsorship dollars).

Insurance is “not something [US] fans have always desired,” according to Caine. “We continually watch the need of our consumers,” Barney stated, “and if the demand is there, we absolutely will offer the product/service.” We are not opposed to ticket insurance from a philosophical standpoint.”

While few professional sports teams have offered refund protection or tickets insurance to yet, Wakeman remarked that “a reasonable number of universities have taken it up [including] some prominent schools like the University of Tennessee and Florida State.”

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