Festivals driving up demand for event insurance in India
Growing popularity of festivals in India has driven up costs and increased demand for insurance to cover organisers in the event of cancellations, according to CTO of non-motor insurance at Bajaj Allianz, Sasikumar Adidamu. Festivals accounted for 30% of the 190-200 event insurance policies sold in 2015-16 and continued growth in demand for such policies is expected. 

As the festive fervour gains momentum with Ganesh Chaturthi, Navaratri and Durga Puja fast approaching, insurance providers are eyeing a lucrative business opportunity. Bajaj Allianz General Insurance Company, for instance, is looking to cash in on insuring festival events this year.

Festival event insurance covers organisers from any legal liabilities arising out of the cancellation of events due to non-appearance of artists, natural calamities or terrorist activities. It also secures the organisers from losses arising out of non-refundable advances paid for catering, venue, etc., in case of event cancellation.

According to Sasikumar Adidamu, Chief Technical Officer, Non-motor, Bajaj Allianz, with festivals gaining popularity, spends on events have also increased significantly, thereby putting organisers at risk of financial loss in case of cancellation of events.

While insuring high-profile or corporate events has become a general trend, of late “we have been seeing more interest from festival event organisers, who are opting for insurance to safeguard themselves from possible losses,” Adidamu told BusinessLine .

Though at a nascent stage, festival insurance is gaining momentum, with States such as Gujarat and Maharashtra leading the pack. Last year, Bajaj Allianz received a premium income of ₹2 crore from festival insurance, while so far this year it has already reached ₹70 lakh.

For Bajaj Allianz, festival event policies accounted for about 30 per cent of the total event policies sold last year. The share is seen increasing rapidly with more organisers opting for the cover.

“Last year (2015-16), we sold a total of 190-200 event insurance policies, of which, about 60 were towards festival events. This year (2016-17) so far, we have already sold 50 policies. The number is likely to go up rapidly as we see increased interest from cities in Gujarat, mainly for Navaratri and Ganesh Chaturthi,” said Adidamu.

The average premium for an event size of about ₹10 crore would be between ₹3 lakh and ₹3.5 lakh. However, Adidamu explained that the premium calculation is done based on the risk assessment of the event and, hence, is flexible.

The company, apart from liability assessment, conducts extensive risk assessment of the events with regard to location of the venue, season during which the event is being conducted, geological data, artists’ profile, and background check of the organisers.

Last year seven claims were made on the company.