In this chapter of our Annual Insurance Review 2020, we look at the main developments in 2019 and expected issues in 2020 for contingency.

Key developments in 2019

In last year's review we focussed on the impact on the contingency market of extreme and unpredictable weather patterns. It appears that these extremes may be here to stay. Perhaps the most high profile case of this during 2019 was Typhoon Hagibis, which hit Japan during, amongst other events, the Rugby World Cup and the Japanese Grand Prix.

Typhoon Hagibis was a major tropical cyclone causing widespread damage and a large number of deaths. The typhoon necessitated the cancellation of three group stage matches in the Rugby World Cup and the postponement of the qualifying session for the Japanese Grand Prix. In the end, both events continued with comparatively minor disruption given the size of the typhoon and its impact on Japan as a whole. This suggests that organisers of major sporting events are becoming more adept at preparing for and accommodating major weather interruptions.

In addition to weather, increasing uncertainty during 2019 has exacerbated tensions in many parts of the world. This has impacted events and event planning and will doubtless have a consequential impact on the contingency insurance markets. Examples of this include the ongoing protests in Hong Kong and the recent protests and civil unrest in Barcelona.

The Hong Kong protests have resulted in, amongst other things, the indefinite postponement of the 2019 Hong Kong Open Women's Tennis Tournament, originally scheduled to take place between 5-13 October 2019. Unrest in Barcelona has meant that the football match between FC Barcelona and Real Madrid, always a major fixture in the Spanish football calendar, has been postponed from 26 October 2019 until 18 December 2019. The unrest arose from the jailing of Catalan separatist leaders for sedition for their role in organising an independence referendum in Catalan in October 2017. Spain's Constitutional Court subsequently declared the referendum to be illegal.

What to look out for in 2020

Given that weather extremes may be the new normal, their ongoing impact is inevitable. For 2020, however, the bigger issue to look out for may well be the impact on contingency risks of increased tension and uncertainty in world events, both economic and political.

The ongoing Hong Kong protests are one example of this tension and uncertainty spilling over and impacting events. These protests show no sign of abating. It should be borne in mind, however, that widespread civil unrest is not the only way that events can be disrupted. The current tenor of political discourse has made well-organised but targeted protests more likely, which can equally disrupt events. The recent "uprising" by the Extinction Rebellion group that was organised for the 5 day period of 14-19 October 2019 is a good example. Look for more co-ordinated campaigns of targeted disruption in large cities in 2020, motivated by issues such as climate change, Brexit (in the UK) and concerns over social and economic inequality, similar to the Occupy Movement in late 2011 and early 2012.

Another area that may come to the fore is the boundary between a specific threat and a general fear, when protests or social unrest lead to the fear of harm even where there is no reason to think a specific event will be impacted. Policyholders faced with reduced attendance arising from such general concerns may well prefer to postpone an event. Depending on the wording in place and the true severity of any threat, this may lead to the boundaries of the contingency cover in place being tested.