With 134 employees in total, the group provides insurance coverage to more than 100 major league sports teams (NBA, NFL, NFL, MLB and more) and thousands of athletes, 500+ colleges and universities, and 2,000+ secondary/K-12 Schools.
“By bringing BWD Sports & Entertainment and Team Scotti together in our new NFP Sports and Entertainment Group, we’ve been able to create a dedicated practice for the sports and entertainment industries, with a holistic view and a complete understanding of the business on multiple levels,” said Henry Lombardi (pictured), executive vice president and leader of NFP’s property and casualty business.
“As we arrive in 2021, we think there are going to be opportunities where businesses are looking for brokers that have the best expertise. With insurance market pricing, terms and conditions continuing to become more challenging, businesses are going to look for leaders and specialists who truly understand their businesses. At NFP, we see ourselves as a leader in the sports arena, which is why we thought it was time for us to bring all of our resources together in one group.”
The insurance market for the sports and entertainment industries has been very competitive for the past few years. Brokers were able to negotiate pricing, capacity, and policy terms and conditions on behalf of their clients, but, according to Lombardi, that is now changing and all three of those areas are being adversely affected. Rates are on the rise because of the broader spectrum of risk potentially impacting sports and entertainment businesses, whether that’s more extreme weather events, the ongoing low interest rate environment, or the social and economic issues that the country is dealing with as a result of the COVID-19 pandemic.
“All of these challenges are changing the rating basis for insurance companies,” Lombardi told Insurance Business. “They’re also starting to restrict their terms and conditions and use their capacity more selectively. This forces clients to ask the questions: ‘How much of my budget am I going to allocate for the cost of insurance? And what strategies can I use to maximize that purchasing power and get the limits that I feel are needed?’ There is capacity out there, but it’s expensive today. We’ve watched that dynamic materialize over 2020, and I think we’ll see more of that as we go forward into 2021.”
With this challenging insurance market dynamic and certain disappointments for sports and entertainment businesses throughout 2020 – primarily, disputes around business interruption losses triggered by the COVID-19 pandemic – more businesses in the sector will likely start shopping around for their insurance needs in 2021.
“I think businesses have to look around first from the standpoint of selecting a partner who understands their business,” Lombardi commented. “In a soft market, someone might offer them premium savings of 5% or 10%, or they may offer more limits. That’s a sale, but to me, that’s not a strategic sale. Today, I think buyers are looking more for strategic value from their broker partners, and for expert insights about the market and alternative risk transfer mechanisms.
“With the formation of the NFP Sports and Entertainment Group, we can bring that holistic approach to our clients. We see ourselves as moving towards being a specialty broker in different businesses. We have a high degree of subject matter experts within our practices, which really differentiates us as a firm.”