For many years, weather-related event cancellation claims in Europe followed a familiar pattern of storms, heavy rain and high winds. Heat was sometimes a concern but rarely the deciding factor in whether an event could proceed or not.
Yet once again this summer, prolonged periods of extreme heat caused significant event disruption across Europe. For underwriters in the contingency and event cancellation market, the change is no longer only visible in models and headlines but in claims notifications.
The weather itself is only part of the story. The response of local authorities also grappling to manage this heightened risk is an increasingly significant factor for the contingency market. Faced with heat warnings and concerns over crowd welfare, authorities are taking an ever more cautious approach to public safety. With a higher concentration of people in a relatively small area, authorities can become anxious about pressure on healthcare systems already struggling with increased heat-related casualties.
As such, authorities are now much more willing to withdraw permits or impose conditions organisers can sometimes struggle to meet at short notice. In several recent cases, events all set to proceed were cancelled because the relevant authority deemed the risk simply too great. Additional water stations, shaded areas, cooling infrastructure and revised crowd-management arrangements are becoming increasingly common requirements. In many cases, authorities request such measures just days before an event. For organisers the ability to respond quickly is becoming critical to maintain operational resilience. Over time, many of these additional measures are likely to become anticipated standard practice rather than abrupt exceptional precautions.
The challenges posed by the increasing weather severity and local authorities’ response to that raises questions about the long-term viability of some events. Extreme weather has already rendered some unsustainable, one example being a popular Continental European festival that discontinued following several weatherrelated disruptions. Yet the festival and live-events industry has vast experience of weathering storms of many different kinds, with very professional organisers well versed in dealing with complex, often time-critical difficulties.
Some organisers are already adjusting when their events take place. In parts of southern Europe, festivals increasingly start later in the day or closer to the evening, avoiding the most intense heat. Others are considering completely different dates altogether. Neither solution is risk free as moving schedules, either by hours or days, creates new logistical, regulatory and commercial challenges.
Should a show be cancelled, event cancellation insurance restores organisers to the financial position they would have been in had the event proceeded. Paying for last-minute measures required by local authorities is therefore something insurers were happy to do if it meant an event could go-ahead and avoid the cost of total cancellation. This, unfortunately, is not now possible as these risks are no longer outliers but an established recurring feature. What was once viewed as an exception is becoming an operational certainty, requiring a mindset shift for insurers, brokers and organisers alike.
Insurers will maintain their staunch support for the events businesses through risk transfer, yet the emphasis on preparation and risk management is fast becoming equally critical to its future success. The post-pandemic era saw a significant increase in the number of festivals being organised, with organisers and festivalgoers alike highly motivated to make up for lost years. Demand remains strong for this vibrant colourful industry – taking the necessary steps now will help ensure it remains so long into the future. The show must go on but the way it is staged will need to change.