The last Olympic Games were already expensive for insurers: the postponement of the world's biggest sporting event in Tokyo in 2020 probably cost them three billion dollars due to the coronavirus pandemic.

This year, in Paris, the focus is on the fear of terrorist attacks in light of the wars in Gaza and Ukraine, as well as cyberattacks. Allianz is the official insurance partner of the Games from July 26 to August 11 and the Paralympics that follow - but by no means the only one. The International Olympic Committee (IOC) and the French organizers have also purchased insurance cover from the London insurance market Lloyd's.

"We are aware of the geopolitical situation the world is in," said Eike Bürgel, who is responsible for the Olympic and Paralympic Games at Allianz. "We are convinced that the IOC and the Organizing Committee, together with the French authorities, will take the right measures if challenges arise on the ground."

The head of the Paris police considers Islamist attacks to be the greatest security risk for the Games. In Saint Etienne, a man was arrested in May on suspicion of preparing an attack on the city's stadium in the name of ISIS during the Games. Games of the Olympic soccer tournament will be held there. This shows that the threat to the games is still real, said Adam Carrier from the crisis management consultancy Another Day. The fact that the Israeli team is taking part is another factor, according to insurers. In the event of certain threats, the opening ceremony, which is actually due to take place on the banks of the Seine, could be postponed.

POSTPONEMENT DUE TO CORONA COST 3 BILLION DOLLARS

According to two insiders, the IOC and leading insurers met back in May to discuss measures to reduce the risk. Insurance expert Marcos Alvarez from Morningstar said that a deadly attack in Paris could cost insurers several billion dollars more than the three billion dollars they had to pay for the postponement in Tokyo.

The IOC usually buys insurance cover for the Olympics years in advance, typically to the tune of 800 million dollars. It would not comment on this, citing confidentiality agreements. The IOC only explained that it was a matter of "covering part of the operating costs" if the Games were to be canceled. Separately, the national organizing committee is covering its costs, as are television broadcasters, sponsors and tour operators. Since the attack on the World Trade Center in New York in 2001, terrorist attacks have been excluded from the standard cancellation policies, but they can be insured separately.

But not only attacks, cyber attacks with artificial intelligence could also hit the Olympics hard - be it ticket sales, fraud or manipulation of live television broadcasts, says Edel Ryan, who is responsible for sport and entertainment at insurance broker Marsh in the UK. In this case, decisions might at least have to be postponed or even canceled. "Logistically, that would be a nightmare," says Imogen Mitchell-Webb from HF, a law firm specializing in insurance. "There's no room in the tight schedule to reschedule things."

(Collaboration: Karolos Grohmann; Written by Alexander Hübner. Edited by Olaf Brenner. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)