Industry snubs skier-day insurance
When Vail Resort made up for lost income by collecting $4.4 million from a reduced paid-skier-day insurance policy two seasons ago, the big fear was Y2K, and the relatively new insurance coverage for ski resorts was big news. As many as 20 resorts around the country sought similar protection during the past few seasons.But more recent events drought, wildfire and terrorism, for example have changed the risk equation. MDM Group Associates, the company that wrote the policy for Vail in the 1999-00 season, did not insure any ski resorts last season, and Vail Resorts is not considering the policy for this year."We don’t believe it’s as appealing as it was in previous years," says Kelly Ladyga, VR’s communications director. Ladyga says both price and the type of coverage offered play a role in VR’s considerations.Joe McNasby, president of the Steamboat Springs-based insurance company, acknowledges that conditions have changed substantially in the past year, partially because of events like the Sept. 11 terrorist atrocities and partially because of the stock market decline. Both factors have affected the price of insurance, he says.Last year’s terrorist attacks on the World Trade Center have already been described as the single costliest event ever for insurance companies. Claims related to the attacks will affect nearly every insurance company in the world, linked together by a web of re-insurance agreements. And like many other businesses, the insurance companies have seen their stock portfolios drop in value. In some cases, that means higher premiums for customers.McNasby says the company can’t provide "all-risk" insurance. But he is trying to assemble insurance packages that could be of interest to ski resorts in the future. McNasby says resorts could benefit from making such coverage part of their long-term risk management strategy instead of linking insurance needs to a one-time event like Y2K.Specifically McNasby says he is trying to put together packages that cover risks like reduced snowfall, especially during certain key months, road closures and hazards like wildfire. Different from property insurance, the latter type of coverage could compensate resorts if they see a dip in the number of customers due to facilities being damaged by a fire. Other types of insurance under consideration that might be of interest to ski resorts includes coverage for business lost due to airline stoppages. McNasby says he is even looking at insurance with regard to the lack of water for snowmaking, but says it would be difficult to put something together in time for this season.Adjusting insurance services for emerging or previously unconsidered risks is simply part of trying to create new markets and doing business in a dynamic industry that changes with external conditions, McNasby says, explaining that he has looked at preliminary numbers for some of the packages, but has not put together anything definitive.”I’ve talked to the brokers for the resorts and told them where we stand with our product," McNasby says. "We’ve been able to offer some kind of package every year since 1997."
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