Climate Change in the World of Major Events

Climate change is no longer a distant concern - it is an immediate and tangible threat that affects various aspects of our lives, including major events. As global temperatures rise and weather patterns become increasingly volatile, the impact of climate change on major events has become a cause for concern, with the insurance industry registering $313b in economic losses in the last year.

“Major events, from sports competitions to festivals, concerts and conferences are often hosted outdoors and have always been vulnerable to the whims of weather. Climate change, in the form of rising temperatures, extreme weather events and shifting seasons, is intensifying the risk,” says Philip Cronje, Business Unit Manager of Aon South Africa’s Sports, Recreation and Entertainment Division.

Following are a few examples of noticeable weather events that can have a catastrophic effect on a major event:

• Weather conditions can alter event conditions; for example, an outdoor music festival during a heat wave can adversely affect the comfort and safety of attendees. Similarly, a winter event may grapple with a sudden cold spell or may be warmer than anticipated.
• Extreme weather events such as floods or wildfires are becoming more frequent and severe. These events can lead to the postponement or cancellation of a major event, causing financial losses for organisers and disappointment for attendees.
• The threat of damage to infrastructure in the lead-up and during an event is a growing concern for major event organisers and their insurers. Consider a stage that is built for an outdoor concert, that is damaged during a major storm the night before the concert, which could incur additional costs or even lead to the event being cancelled.
• Water scarcity in a South African context is also cause for concern with interrupted municipal supply and prolonged periods of drought, impacting water availability for major events, making it challenging to maintain bathroom facilities, event spaces and green areas.
• The opposite of this scenario is heavy rainfall and flooding that would not only affect the actual event itself but also access to the venue from a logistical and safety point of view.

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Consider some examples of major events that have been disrupted by weather catastrophes:

• Cape Town Cycle Tour (2017): The Cape Town Cycle Tour, one of the largest timed cycling events in the world, was cancelled due to extreme weather conditions, including gale-force winds. The safety of participants became a primary concern, leading to the decision to call off the event.
• Comrades Marathon (Various Years): The Comrades Marathon, an ultramarathon race run annually between Durban and Pietermaritzburg, has experienced cancellations and route alterations due to adverse weather. Heavy rain and concerns about the safety of runners on the hilly course have led to decisions to modify or cancel the race on some occasions.
• Durban July Handicap (Various Years): The Durban July is a prestigious horse racing event, and while not cancelled entirely, it has seen delays and rescheduling of races due to unfavorable weather conditions, including rain affecting the racing surface.
• Cricket Matches and Tours: Various cricket matches and tours in South Africa have been affected by weather conditions, including rain. While not outright cancellations, rain delays and interruptions can significantly impact the scheduling and outcome of matches.
• Winter Olympics (various years): The Winter Olympics are susceptible to disruptions due to extreme weather conditions, including heavy snowfall or unseasonably warm temperatures. In 1960 (Squaw Valley, USA), there were concerns about lack of snow, while in 2010 (Vancouver, Canada), unusually warm weather affected some events.
• FIFA World Cup (various years): Soccer World Cups have faced weather-related challenges. For example, the 1994 World Cup in the United States experienced extreme heat in some host cities. Qatar, the host of the 2022 World Cup, faces challenges due to its extreme summer temperatures, leading to plans to move the tournament to the winter months.
• Boston Marathon (2018) - Boston, USA: The 2018 Boston Marathon faced extremely harsh weather conditions, including cold temperatures, strong winds, and heavy rain. These conditions led to lower participation rates and challenges for both runners and organisers.
• Indian Premier League (IPL) Cricket Matches (various years): IPL matches, held in India, have been affected by weather conditions, including rain. Rain delays or cancellations have led to adjustments in match schedules and affected team strategies.
• Glastonbury Festival (Various Years): The Glastonbury Festival in the UK has experienced disruptions due to heavy rain and mud. In 2005, severe weather led to the cancellation of the event for the first time in its history.
• Rolling Stones Concert (2006): A concert in St. Louis, Missouri, was disrupted by a severe thunderstorm. The show was stopped, and attendees were evacuated for safety.
• Paul van Dyk's Love Parade Set (2010): The Love Parade electronic dance music festival in Duisburg, Germany, was marred by a stampede that occurred in part due to overcrowding exacerbated by adverse weather conditions.

These examples highlight how weather catastrophes or extreme conditions can disrupt a wide range of events, from sports competitions to cultural festivals. As climate patterns change, the resilience and adaptability of event planners become increasingly important to mitigate the impact of such disruptions.

The eventing and insurance industry recognises the impact that climate change is having on major events. Finding solutions and adapting to this new reality is an ongoing process:

1. Insurers are developing advanced climate risk models that consider historical weather data and future climate projections. These models help major event organisers to be better informed of exposures to climate-related risks and the best possible date to schedule an event.
2. Insurers are offering tailored coverage options to address specific climate-related risks. An example is cancellation and abandonment insurance which provides coverage for financial losses incurred due to the cancellation or abandonment of an event. It typically provides cover for the costs associated with non-refundable deposits, booking costs and other related expenses and will respond to a claim for adverse weather conditions.
3. Insurance companies are more inclined to work with major event organisers to implement risk mitigation strategies. This includes recommendations for venue improvements to withstand extreme weather, but also from a liability perspective on safety and security.

A cancellation and abandonment insurance policy provides financial protection to organisers of major events. “While there is not much we can do to prevent events that are beyond our control, it is possible to plan for them. The cost of implementing the cover is minimal, compared to the financial and legal ramifications of having to cancel or abandon a major event in its entirety,” says Philip. 

“It is important for organisers and investors in major events to have a candid conversation with a professional risk adviser who specialises in the sports, recreation and eventing industry, who can objectively interrogate the nature of their business, its unique needs, reliance on its supply chain, the range of likely risks and how to mitigate the impact that these would have in a severe weather scenario. Appropriately scoped insurance covers and solid risk management strategies will drive the preparedness of organisers, safeguarding the future of major events and allowing organisers to make better decisions not only about risk mitigation, but also about recovery when weather events beyond your control put pay to the best planning,” Philip concludes.

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