National Indemnity Co., a wholly owned subsidiary of the Berkshire Hathaway Group, has concluded an insurance package with FIFA, soccer football’s governing body, to insure next summer’s World Cup Finals in Japan and Korea against risks of cancellation.
NI replaces French insurer AXA, who announced that it would withdraw its coverage effective November 11, following the attacks on the World Trade Center. (See IJ Website Oct. 15). Although AXA had continued negotiations with FIFA representatives, they were unable to reach a new agreement.
FIFA President Sepp Blatter said he was delighted with the new agreement, which reportedly cannot be canceled, as it removes any doubts that the World Cup will take place as scheduled. He reiterated his earlier statement that FIFA had done nothing to cause AXA to breach their agreement, had made all premium payments on time, and that FIFA was pursuing legal remedies against the company.
Berkshire, headed by the legendary Warren Buffet, now has a double stake in the World Cup. It had previously concluded an innovative coverage package against cancellation of events due to earthquakes in partnership with Munich Re. (See IJ Website Aug.31)
Although FIFA officials had no comment either on the extent of the coverage or its cost, analysts indicated that it was probably paying a premium well over the $16.5 million it had agreed to pay AXA, especially if terrorist acts are covered.
Topics AXA XL
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