No to cancellation of London Olympic Games

No to cancellation of 2012
London Olympic Games

By Alex P. Vidal

LOS ANGELES, California -- The proposed cancellation of the 2012 London Olympic Games on July 27 to August 12, is being met with derision and suspicion from different sectors even as worries about possible terrorist attack mount.

Cancellation proponents fear that the presence of battleships, snipers, surveillance drones, SAM sites and MI5 crawling all over the city as part of security measure will scare tourists and spectators not to mention possible delays to be incurred by those flying to and from the Heathrow International Airport and those going to competition venues from their hotels.

Jamie Dunkley, financial services correspondent at the Daily Telegraph, Sunday Telegraph and telegraph.co.uk who writes about insurance, asset managers, banks and other issues relating to the world of business, had warned that cancelling the Summer Games would cost $5 billion.

REVENUES

“The bill would cover the costs incurred and revenues lost by companies such as advertisers and media companies, according to reinsurer Munich Re. Other forms of cover, including employers and public liability insurance, would add to the industry's losses,” wrote Dunkley. “However, policies will not cover cancellation or disruption caused by transport chaos in London.”

Dunkley explained that Andrew Duxbury, London underwriting manager at Munich Re, which has an exposure of about £280 million to the games, has said: "The revenue exposures between the World Cup in Africa and the London Olympics are similar, so I would expect the overall cancellation exposure to be a similar amount – about $5 billion."

The International Olympic Committee receives billions of dollars in television rights, meaning any disruption would prove extremely costly. "TV companies across the world have committed huge resources to ensure they are able to show the opening and closing ceremonies and broadcast Usain Bolt defending his 100m title," Dunkley quoted Mr Duxbury.

CHALLENGES

Hosting the Olympics in London will bring different challenges to those posed in China four years ago. "In Beijing, natural catastrophe risks such as earthquakes concentrated insurers' minds," he said. "In London, flash flooding from summer storms could cause temporary disruption. However, issues such as terrorism are potentially much more serious.

"One thing that won't trigger most cancellation policies is general travel dislocation. If 10,000 people fail to get to the stadium on time because they are stuck on the Jubilee Line then that will likely not be covered. The onus is upon everybody to build in extra journey time and hope that London's public transport network can take the strain."