By Carolyn Cohn and Noor Zainab Hussain

LONDON (Reuters) – The local Tokyo Olympics organising committee is unlikely to get much of an insurance pay-out due to lost ticket sales from a ban on spectators, after using up much of its event cancellation policy on postponement costs last year, insurance sources say.

The Olympics will take place without spectators in host city Tokyo, organisers said last week, as a resurgent coronavirus forced Japan to declare a state of emergency in the capital that will run throughout the Games.

Some events outside Tokyo will have spectators, but ticket revenues of about $815 million are set to dwindle to close to zero.

Organisers said last December that the entire cost of holding the Games would be about $15.4 billion.

Ratings agency Fitch estimate the total insured cost of the Olympics at around $2.5 billion. Analysts at Jefferies last year calculated the total insured costs of the Games at $2 billion, including TV rights and sponsorship, plus a further $600 million for hospitality.

While the International Olympic Committee is responsible for sponsorship and broadcasting rights of the Games, the Tokyo organising committee is responsible for ticket sales.

Industry sources estimate the Tokyo committee has taken out an event cancellation policy totalling $500-800 million, though they say the full ticket prices would not have been insured.

Policyholders can typically claim for postponement costs on such a policy, said Leigh Ann Rossi, chief operating officer in the sports and entertainment group of broker NFP.

But after the Games were postponed last year, much of the local organisers’ policy limit may have already been used up in a claim for costs such as the rebooking of hotels and sports venues, leaving little room for a pay-out now.

Unless there’s any limit left, I think it likely this would be an uninsured loss,” said Duncan Fraser, global practice leader, sport and entertainment, at broker Howden.

EVENT CANCELLATION POLICIES

The Olympics are typically insured by Lloyd’s of London firms such as Beazley and Tokio Marine Kiln. Beazley said it did not comment on client-related matters. TMK did not immediately respond to a request for comment.

Travel and hospitality groups, sponsors and the International Olympic Committee are also likely to face losses due to the disruption from the spectator ban, and claims on their event cancellation policies, sources said.

The IOC takes out around $800 million of protection for each Summer Games, which covers most of the roughly $1 billion investment it makes in each host city.

The IOC may have more scope for a claim than the Tokyo committee. It did not have a postponement clause in its policy, so was unable to claim insurance last year, a third broking source said.

The IOC and Tokyo Organising Committee did not respond to requests for comment.

Reinsurers, which insure the insurers, are likely to face the bulk of any claims as “high-severity exposures are typically reinsured”, Fitch said. They may face a bill of $300-400 million due to the spectator ban, mainly from lost hospitality and ticket sales, Fitch estimated.

Reinsurer Munich Re has a $500 million exposure to the Tokyo Olympics, one source previously told Reuters. It declined to comment on Monday.

Swiss Re reiterated on Monday that it has a $250 million exposure to the Olympics.

(Reporting by Carolyn Cohn in London and Noor Zainab Hussain in Bengaluru; Additional reporting by Alexander Huebner in Munich, Paul Arnold in Zurich and Elaine Lies in Tokyo; Editing by Emelia Sithole-Matarise)