NU Online News Service, July 16, 2:37 p.m.EDT

An estimated four billion people—more than half the world'spopulation—will be tuning in to what the BBC calls the “first truly'Digital' Olympics.”

The BBC alone, the U.K.'s official games dispatcher, will have765 staff members at the event—a fraction of the 21,000 visitingon-the-ground journalists, transmitting thousands of hours ofcontinuous live coverage.

Due to the heavy traffic the London 2012 Olympics will place onbroadband, cellular network and radio frequency capacity, it is upto insurers and reinsurers to help globally transmit the event.

Responsibility for planning and implementing Olympic riskstrategy, including mitigating event cancellation due to terrorismand other liabilities, is being taken on by the InternationalOlympic Committee (IOC) and the London Organizing Committee of theOlympic Games (LOCOG), who are considering a risk transfer throughthe insurance sector, says Aspen Re.

The most cutting-edge risks, however, lie in the increasinglyexpensive event-broadcast rights, relying on the use of, amongother technologies, the recently launched six-ton, 20 kilowattSES-4 satellite that has beamed down hundreds of TV, HD and 3Dchannels since February.

Rights for the coveted full U.S. coverage of the 2010winter and 2012 summer Olympic Games were sold to NBC for $2billion, while YouTube has signed on to broadcast the Games forfree in Asia and Africa.

Even where there is no cell coverage, handheld devices canreceive streaming Olympic broadcasts via satellites, writes LeeTookey, Aspen Re's head of aviation reinsurance, space andspecialty lines, which will stress even modern levels of cellularnetwork capacity and drive up insured values.

Satellite News Gathering (SNG) systems will provide the channelslinking broadcasters and satellites, a system highly regulated bythe U.K.'s Office of Communications (OFCOM), the independentregulator and competition authority forthe U.K. communications industries.

London-based Inmersat is part provider of SNG capabilityutilizing 4-series satellites to provide live video, Internet andemail transmission—but even these interstellar beasts are prone tosignal-weakening space weather, a factor outside of operatorcontrol.

Intense sun-spot activity can cause temporary blackouts and evendamage satellites. The first five months of 2012 were quietcompared to 1992, with an average of 81 monthly observed sunspots,but higher than in 2008 when sunspots averaged less than seven permonth, says an Aspen Re whitepaper authored by Tookey.

“Insurers must be confident that they have sufficientinformation about the risks they underwrite, drawing on engineers'knowledge to assess the risks associated with a new project,” saysTookey. For example, “they need to understand all stages of asatellite's life—from design through construction, to launch andoperation—given that coverage is broad and is essentially aproduct-guarantee policy.”