Live events reinsurance scheme ‘limited by late introduction’ 

The former Conservative government’s live events reinsurance scheme had limited impact on stimulating additional activity, according to an evaluation of the scheme.

An evaluation report, commissioned by the Department for Culture, Media and Sport (DCMS) in July 2022 and completed in June 2023, was published late last month.

The live events reinsurance scheme was a cost indemnification policy designed by DCMS and the Treasury to cover costs incurred by live events if the events were legally unable to take place due to measures imposed by Covid outbreaks.

It launched in September 2021 and covered a total 169 events across 87 policies over its duration, insuring £116.8m in costs – around 15% of the potential £800m underwritten by the government.

Business to business events made up the highest share of insured events, at 57, followed by 47 live music and 25 live sporting events.

Only one claim was made, which the report says was settled for £190,000 with an unnamed party, meaning the scheme generated £5.9m in income for the Exchequer via premiums paid by event organisers. The report adds this income was largely spent on scheme administration.

‘Limited scope’

The evaluation report says that the attractiveness of the insurance scheme to event organisers, as well as its effectiveness in stimulating activity in the events sector, appeared to be limited by its late introduction and the limited scope of the risks covered.

“By September 2021, the perceived risk of a reintroduction of legal restrictions had substantially fallen, owing to the success of the vaccination programme, and event organisers tended to see other issues (such as restrictions on capacity) as more significant risks,” the report states.

The finding echoes concerns raised at the time, with some live events, including festivals, deeming the insurance not fit for purpose.

Looking at lessons learned from the scheme, the evaluation report says an alternative design would likely only have been possible if the public sector assumed the full risks involved, or provided subsidies to the sector in order to lower the cost of premiums.

There are questions regarding the economic case for such an approach, the report continues, given that unemployment rates had fallen to historically low levels at the time. The report also highlights that one of the scheme’s achievements was taxpayers’ minimal exposure to unnecessary risk.

The report says the case for more expansive public intervention would rest on how far live events generate opportunities to raise productivity and positive externalities, such as wellbeing. It suggests the government may want to consider research in these areas to strengthen future decision making.

Other recommendations for the government raised by the report include undertaking planning for similar schemes and more engagement with the insurance sector to ensure preparedness if similar interventions are ever needed.