As sports events have been cancelled, so many companies have cancelled their sponsorship deals. This is a huge saving for marketing departments within insurance companies, MGAs and brokers of course. But will it prompt a complete re-think as regards marketing strategy, or will the same events get support once things return to some kind of normality?
Insurance companies have committed to spending billions on sponsorship agreements over the next decade and the impact of the COVID-19 pandemic is likely to have a profound impact on these agreements, says GlobalData’s Sportcal.
Conrad Wiacek, Head of Analysis and Consultancy at GlobalData’s Sportcal, comments: “While financial services in general, and insurance specifically, do not set the pulses of sports fans racing, they are a crucial component of the sports industry, providing significant financial muscle.
“With insurance companies accounting for some of the largest deals in sport, all have been impacted in some way by the decimation of the sporting calendar. One of the biggest front of shirt deals in the English Premier League is AIA’s deal with Tottenham Hotspur, worth an $49.8m, while the likes of Allianz and State Farm will be hoping to fulfil their deals with the Olympic Games ($25m per year) and the NBA ($30m per year) respectively.”
In the UK, Bennetts sponsor the British Superbike race series, RSA are famously involved in the Cheltenham Festival, although the outbreak of the Coronavirus prompted a late cancellation of corporate hospitality. Meanwhile Allianz pulled their sponsorship of Saracens earlier in 2020, after the club were found to have breached salary cap rules.
More than 255 insurance brands are involved in sponsoring sporting properties, according to GlobalData’s Sportcal Intelligence Centre, providing over $700m in revenue annually. The industry is, therefore, likely to be severely impacted by the COVID-19 crisis.
Wiacek continues: “From the naming rights to venues such as the MetLife Stadium deal – worth an estimated $19m in a deal set to run to 2036 – to the likes of Allianz spending over $90m across its 31 deals and committed to spending $647m post 2021, the insurance industries commitment to sport is significant. As a result, any sort of government pressure on the industry to honor insurance claims resulting from COVID-19 will likely see this sponsorship spend reviewed.
“As in any time of crisis, marketing spend is usually one of the first areas impacted in any sort of economic downturn so sponsorship agreements may be reviewed as some businesses look to scale back external spending to secure their own futures. With over $3bn committed to sponsorship agreements post 2021, where before insurance firms where seen as a safe pair of hands for any sporting organisation looking for a sponsor, the insurance sector may be a far more risky proposition moving forward.”