Kicking off Fantasy Football Coverage

New York Brokerage Building Suite of Fantasy Sports Insurance Products

Fantasy football: It’s a decade-old, multi-billion dollar industry that involves hundreds of companies and directly touches the lives of roughly 27 million Americans. So it makes sense that, eventually, the insurance industry would invent some new products for it.

But it was only this past fall that Long Island, N.Y.-based insurance broker Intermarket Insurance Agency began selling what is believed to be the first insurance policies for fantasy football managers.

The concept was hatched back in 2008 when Henry Olszewski, a sales executive and avid fantasy football player, saw his hopes for a winning season dashed when his key player, New England Patriots Quarterback Tom Brady, sustained a season-ending injury. Soon after, Olszewski half-jokingly remarked to his colleague, Anthony Giaccone, that he wished he could’ve had an insurance policy on Brady.

They both soon realized it wasn’t a bad idea.

“We started to talk about it, and then we reached out to a few underwriters,” Olszewski said. “One of them came back and said we could do it.”

For those unfamiliar with fantasy sports, here’s a primer: A commissioner sets up a league among friends and peers. That league then “drafts” players from across any real-life team to play on their own. Each team in a fantasy league is comprised of a set number of positions. For instance, a typical fantasy football team might have one quarterback, two runningbacks, three wide receivers, etc.

Fantasy points are scored when a real-life player performs certain tasks, such as scores a touchdown, or runs for a certain number of yards. Because of the lopsided nature of some scoring systems, an injury to a key player can be devastating.

Throw in the money that many people spend on fantasy sports – typical leagues can have fees of around $150, and prizes of $5,000 – and there is a recipe for an insurable interest.

Enter Fantasy Sports Insurance, a subsidiary of Intermarket Insurance Agency. The company is selling policies underwritten by Lloyd’s of London that indemnifies a fantasy football team owner against the loss of one of the premier players on his team. Their premier players are pulled from a list of 50 assembled by FSI, and team-owners pick a set number of games that he or she does not want the premier player (or players) to miss.

FSI uses that information to determine the cost of a policy. Typically, it’s about 10 percent to 20 percent of the cost of the league entrance and associated fees. So, given the $150 fee mentioned earlier, a typical policy may cost around $18.

“These are relatively small policies, so it’s a sheer volume concept” Olszewski said.

But the volume is there, certainly. While Olszewski declined to say how many policies have been written or claims paid, he did say that the site, in the run-up to the beginning of the season, had thousands of hits a day.

“The response has been very positive,” he said. “Commissioners think it’s a fantastic concept. A lot of the people who buy it think if they’re already spending $200 … what’s another $20?”

And the coverage has been so successful, Olszewski said, FSI plans to launch a second product, this time for fantasy baseball players by next season.