There are no medals given out to brokers, underwriters and riskmanagement experts charged with assuring a safe, secure–andinsured–Olympics, even though all three insurance functions must bewinners to help the world's biggest sporting event make it to thefinish line in one piece.

With the winter Olympics in Torino, Italy just recentlycompleted, attention is turning to the 2008 summer games, to beheld in Beijing, China. To call the Olympics a massive undertakingfor anyone involved in risk management and insurance is anunderstatement.

The number of participants alone presents an exposure ofstaggering magnitude. According to the official Web site for theTorino event, more than 2,500 athletes attended the games,accompanied by over 2,700 trainers and escorts from 80 countries.The games involved some 2,500 paid staff, 18,000 volunteers andthousands of media representatives.

In addition, there were thousands involved in support servicessuch as doctors, nurses, security, drivers–plus tons of equipment,including computers, fax machines, and 3,900 cars and buses. Therewere also hundreds of thousands of visitors and spectators onhand.

All of that requires coordination, planning, and, of course,comprehensive insurance and risk management programs.

In October, Marsh announced that it was selected to provideinsurance consulting and risk management services for the 2008Beijing games after a highly competitive selection processinvolving several other brokers. Marsh said it would be providingthe services in collaboration with China Sports Insurance BrokerCompany, Ltd.

According to Warren H. Harper, a global events practice leaderand senior vice president with Marsh, the work the broker will bedoing in Beijing will be little different from what it has done inthe past with other Olympic events.

Mr. Harper said that typically the broker would identify risksand advise what will be needed to mitigate those exposures, whetherthat means development of loss and safety controls or the transferof risk to insurers.

Marsh's responsibilities will also require contract review,development of wording of contracts, acting as a liaison andadviser with prospective insurers, and dealing with any capacityissues if they arise, he noted.

The broker's experience goes back to 1992 in Barcelona, Spain,where its forerunners, such as Johnson & Higgins, were involvedin the games.

Despite this being the first time China has ever hosted theOlympics, Marsh has resources in Hong Kong and Beijing to handlethe work. For China Sports, noted Mr. Harper, it means anopportunity for that firm's brokers to learn more about riskmanagement on a grand scale.

“This is an educational experience both ways,” said Mr. Harper.“For us, as consultants, we have to put our prior experience withthe games into context. For them, some of the technical aspects ofrisk management are fairly new, especially for an event of thissize.”

However, he said he has been pleased with the pace of learningby the China Sports' team. “They have been extremely diligent andhave done a lot of research prior to these games,” he said. “Theyhave been making up the learning curve very quickly.”

Mr. Harper said he could not comment on insurance placements atthis time because they are still in the works.

In the past, the Olympics faced a number of challenges as far asrisk placements. Notably, said Mr. Harper, this has concernedcancellation coverage, standard property and liability, personalaccident for those involved in the games (including players,referees and volunteers) as well as auto coverage (which issometimes picked up by the host country, state or a sponsor). Forthe summer games, it also includes marine and indemnity relatedcoverage for sailing events.

Joe Addison, managing director of Aon's Entertainment PracticeGroup, pointed out that based on his firm's own involvement in pastOlympics–also traced back to 1992 in Barcelona–it is not theInternational Olympic Committee, but the local organizing that hasto be worried about risk transfer.

“It is an event that has the spotlight of the world on it,” hesaid. “The major concerns have been slips and falls and propertydamage. In that sense, it is no different from a ski resort. How doyou move people on and off a lift? That concern has not changed.What has changed is the concern with terrorism, and security has tobe phenomenal.”

No matter how experienced a broker might be, however, thebiggest challenge is anticipating future risks. “Every day is a newworld–there is always something we have not prepared for,” said Mr.Addison. “There is that 95 percent that we are prepared for, andthen there is the 5 percent we are not.”

He said there is plenty to be learned from past experiences, butmore importantly, communication between brokers and carriers “isvital to the long-term protection” of the games. “Each event has aunique exposure,” he noted.

Cancellation coverage is one of the most vital risk transfersconnected to the games, he said. Its importance was underscored in2004 when, for the first time, the IOC secured $170 million incancellation coverage for the summer games in Athens.

When it made its announcement, the IOC said it would buy thecoverage for the just-completed winter games in Turin, the Beijinggames and the 2010 winter games in Vancouver, Canada.

“Taking out a policy to manage the risk associated with one'score business is standard, prudent behavior for any modernorganization,” said Jacques Rogge, IOC president at the time.

Having such coverage, said Mr. Addison, is not just limited tothe IOC and the local committee, but is also something televisionnetworks, hotels, restaurants and others who will be depending onrevenues generated by the games should be looking into, he advised.He said the coverage is traditionally tied to a combination ofexpected revenue and expense.

He added that it is never too early for a client to purchase thecoverage. In fact, capacity issues may make it impossible orprohibitively expensive to buy such coverage as the event drawsnear, he warned.

It is also important for the committees to broaden theircoverage under an umbrella policy for a number of exposures, heobserved. “At the end of the day, you need a local policy in placeto satisfy the issues of that country,” said Mr. Addison. “It's awhole process from the very beginning. It's not a renewal.”

“The world of entertainment/events has changed dramatically,”Mr. Addison added, “and I think it is really something people needto take a proactive approach to looking at the risk associated withit. There is nothing worse than having a massive claim, and thenthe committee can't shut down for five- or 10 years because theyare dealing with open issues.”

For the Beijing games, the marriage of risk transfer and theexcitement of athletic competition will be another learningexperience for the brokers involved in the games.

“From a personal perspective, I'm really looking forward toworking with the [Beijing Organizing Committee of the OlympicGames] because it is fascinating to learn more about the societyand the culture,” said Mr. Harper. “That is without match. It willbe a great experience not just for us working on this directly, butfor the rest of the world.”