When the Insurance major Oriental Insurance decided to provide insurance coverage for the IPL tournament, little did they apprehend that there might be reason to redesign the agreement in few months time. The IPL matches were insured by Oriental for a price of around Rs 375 crore. In its original agreement, the insurance coverage was meant to provide protection against cancellation of matches due to a range of accidents that include natural calamities, fire or national mourning and terrorism. Coverage is also provided against loss of revenue due to the cancellation of a match on account of the above mentioned factors.

 

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Now that the tournament is moving out of India, the insurer seeks renegotiation. The premium calculation will not be same as the tournament is held in some other part of the world. “With the change in the venue, the risk factors of the cover will change. We are awaiting a fresh proposal from IPL to know what the venue will be,” said Niraj Kumar, general manager at Oriental Insurance Company.

 

India’s one of the top insurance companies, Oriental will soon start discussing the matter with re-insurance companies, Chairman and managing director M Ramadoss informed the media. This becomes necessary for the insurance companies when they want to distribute risks on large insurance covers by opting for re-insurance. However, Ramadoss made it clear that the amount of premium and the range of coverage are still to be worked out in the new agreement. Indian Premier League organizers however earlier said that they are ready to bear all additional expenses of moving the tournament overseas.

Much to the relief of Indian Premier League, the Title sponsor DLF informed that it has no plan of reworking the existing agreement. “We are not reworking terms of agreement and we will continue with the existing agreement with IPL. We have got good brand visibility through IPL and will continue to get good brand visibility this year also,” Sanjay Roy, DLF spokesperson said. IPL has to work out its additional expenses on account of the international travel and as compensation paid to the cities that will be hosing the tournament. Previous season, the IPL paid nearly Rs. 3.5 crore to the eight hosting cities at the rate of Rs50 lakh for each match. This year, the Indian venues are going to lose on the prominence. Perhaps this is the bitter pill that Indian domestic cricket has to pop up with Indian Premier League losing out its “Indian” portion.

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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."

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