Japan's Unique Insurance: Hole-In-One Coverage

Image of a golf ball sitting in cup
While the odds are long, the feat holds unique cultural significance in Japan, where golfers host extravagant celebrations, often costing thousands

A hole-in-one, or ace, is one of the most celebrated feats in golf, occurring when a player hits the ball directly from the tee into the hole with a single stroke. The odds of an average golfer achieving a hole-in-one are about 12,500 to 1, while for professionals, the odds improve to approximately 2,500 to 1. This rare achievement, often occurring on par-3 holes, requires a combination of skill, precision, and a bit of luck.

In Japan, the excitement and rarity of a hole-in-one have given rise to a unique tradition. Due to cultural expectations, golfers who achieve this feat are expected to host lavish parties, providing meals, drinks, and gifts for friends, family, and fellow golfers. These celebrations can be quite extravagant, sometimes involving tree-planting ceremonies, and can cost thousands of dollars. To manage these costs, many Japanese golfers purchase hole-in-one insurance. This insurance typically costs around ¥6,900 (approximately US$65) per year and provides coverage of up to ¥500,000 (around US$5,000)​.

Hole-in-one insurance was first introduced in 1982 by the Kyoei Fire & Marine Insurance Company. It was created to help golfers manage the financial burden of these celebrations, seen as necessary to share good fortune and avoid future misfortune. The popularity of hole-in-one insurance in Japan has created a niche market that addresses the financial implications of traditional celebrations, highlighting the intersection of cultural practices and economic solutions

Today, about 30 Japanese insurers, including major companies like Tokio Marine & Nichido Fire Insurance Co. Ltd and MS&AD Insurance Group, offer this coverage. Approximately 40% of Japanese golfers have such insurance, highlighting the cultural importance of these celebrations.

Hole-in-one insurance is not exclusive to Japan. In other countries, similar coverage exists under the name Prize Indemnity Insurance. This type of insurance is often used by organisations and event planners to cover the costs of offering high-value prizes during golf tournaments or promotional events. 

Prize Indemnity Insurance

Prize Indemnity Insurance is a specialised type of coverage that protects event organizers from the financial risk associated with offering high-value prizes during contests, promotions, or tournaments. Commonly used in golf tournaments, this insurance covers the cost if a participant achieves a challenging feat, such as a hole-in-one. Event organisers pay a premium to an insurance company, which then takes on the risk of paying out the prize should the insured event occur. This allows businesses to offer attractive prizes without the burden of potential large payouts. Prize Indemnity Insurance is not limited to golf; it can be used for various promotional events, including half-court basketball shots, carnival games, and even large-scale lottery-style promotions​​. This type of insurance enables organizations to drive engagement and participation by offering enticing rewards, knowing that their financial exposure is mitigated​.


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