‘Clearly our data was wrong,’ says an executive at Allianz, one of the biggest insurers of soccer’s most important contest
Allianz SE is one of the biggest insurers of the World Cup. But it missed out on a golden opportunity when defending champion Germany exited the tournament last week.
Before the start of soccer’s most important contest, retailers offered sales promotions or prizes that would pay out if Germany took the crown again this year. To cover the potential payments, those retailers asked Allianz for insurance. The German insurer declined, betting a high likelihood of a victory for its home country, and passed up potential revenue.
“Clearly our data was wrong,” Peter Williams, a live entertainment executive for a commercial insurance unit of Allianz, said in an email. “But prior to the event, I think anybody thought Germany was a favorite.”
The decision was one of many bets made by large insurers as part of the global sporting event taking place in Russia.
The insured value of the World Cup is estimated to total between $6 billion and $7 billion, according to estimates provided by commercial insurer Beazley PLC. That is higher than the estimated $5 billion value of insurance provided as part of the 2014 World Cup in South Africa.