Paris Olympics: AI Hacks and Violence a Concern for Insurers
With the Paris 2024 Olympics fast approaching, insurers are on high alert over potential risks that could lead to event cancellations and significant financial losses. Key concerns include the threat of militant attacks and the disruptive potential of AI-generated fake images.
Political Violence and Security Threats
The geopolitical climate has raised alarms for insurers, particularly with ongoing conflicts and recent terrorist threats in Europe. Eike Buergel, head of Allianz's Olympic and Paralympic program, stresses the importance of the measures taken by the International Olympic Committee (IOC), Paris 2024, and the French authorities. “We are all aware of the geopolitical situation the world is in,” Buergel noted, expressing confidence in the preparedness of the organizing bodies.
"We are convinced that the IOC (International Olympic Committee), Paris 2024 and the national organising committees, together with the French authorities, are taking the right measures when it comes to challenges on the ground."
However, the scale and location of the event present unique challenges. “It's such a large event ... in a very large city, which in itself is quite difficult to police," stated Andrew Duxbury, head of contingency at insurer Beazley. The recent arrest in Saint-Etienne of an individual suspected of planning an attack during the Olympics underscores the persistent threat of Islamist attacks, which remain the top security concern, according to the Paris chief of police.
AI-Generated Threats
In addition to physical security threats, insurers are increasingly wary of digital disruptions. Edel Ryan, an executive in Marsh's, says AI-based attacks also have the potential to disrupt the Games, "whether that is ticketing or fraud, or manipulating live broadcast feeds".
Financial Implications and Risk Management
The financial stakes are high, with the IOC typically securing around US$800m in insurance coverage for each Olympic Games several years in advance. The complexity of the insurance landscape is further compounded by the involvement of various stakeholders, including national organising committees, broadcasters, sponsors, and hospitality providers, each with their insurance needs.
Marcos Alvarez, managing director for insurance ratings at Morningstar, warned of the catastrophic financial impact of a significant attack, which could lead to loss of life, property damage, and business interruptions, potentially adding "several billions" to estimated losses. The IOC's risk management strategies aim to mitigate these risks, although the exact terms of their insurance policies remain confidential.
The experience of the 2020 Tokyo Olympics, which were postponed due to the COVID-19 pandemic, has already provided a cautionary tale for insurers. While standard event cancellation policies often exclude terror attacks, separate coverage is available for those specific risks. The potential for protests and civil unrest, particularly around France's parliamentary elections, further complicates the risk landscape.
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