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First published in ITIJ 110, March 2010

football1Hundreds of thousands of football fans from all over the world will head to South Africa this year for international soccer’s most important event, the FIFA World Cup™. But will it be business as usual for travel insurers, or should the industry brace itself for a surge of claims from a destination with worryingly high crime rates?

South Africa expects between 430,000 and 460,000 international visitors to visit the country specifically for this year’s World Cup, with Group A matches kicking off in Cape Town and Johannesburg on 11 June. This will be the first time the event has been hosted by an African nation, and South Africa, which beat rivals such as Egypt, Tunisia and Libya in its bid for the month-long tournament, is desperately keen to ensure the event is problem-free. The signs, so far, are that it will. Certainly, insurance providers seem sanguine. “Naturally, with the increase in tourists to South Africa in 2010 due to the World Cup, it would not be unreasonable to expect to receive a higher number of claims than is usual,” commented Mike Webb, chief executive of Mondial Assistance. But, continued Webb, the company sees no need to treat the tournament in South Africa as a special case. “The premiums Mondial Assistance charges for tourists travelling to South Africa already take in to account the potentially higher costs for cancellation and medical claims and we are not proposing to change them,” he said. “Mondial Assistance does not have any ‘special’ policies for tourists to such events as World Cup matches. However, in the event of valid claims for cancellation or curtailment arising from ill health or injury, for example, the irrecoverable cost of tickets would be covered by the policyholder’s insurance,” Webb said.

Allyson Da-anov, from AXA Insurance added that South Africa would be considered a relatively high risk for the company and that ‘cancellation claims are higher in value due to the business being long haul, baggage claims are more frequent in view of the crime rate in the country and medical expenses are higher in South Africa’. She added that the company expects the level of risk and the number of claims to increase during the World Cup, but any resulting rise in premium would be very small. Da-anov said: “We don’t have specific policies for events, however if a customer purchases a ticket before they leave the UK and could not attend due to illness, injury or any of the other cancellation perils, then they would be reimbursed for the tickets if this injury/illness forced them to cancel the trip. Also, if they needed to curtail the trip, then any unused tickets/irrecoverable costs would be covered, providing the reasons for curtailment were covered under the policy.”

A successful World Cup will help set the seal on South Africa’s coming of age and affirm its status as a sporting and tourism destination. A tournament beset by crime and other problems, on the other hand, would severely dent the country’s self esteem. Danny Jordaan, chief executive of the FIFA organising committee, points out that South Africa has hosted more than 140 trouble-free world-class sporting events in the last 15 years, including cricket and rugby world cup tournaments. But, speaking at the Soccerex 2009 trade fair in Johannesburg, just ahead of the final draw for the 2010 World Cup in December 2009, Dr Jordaan conceded that the host nation still has work to do, admitting: “International outcomes are about choice. They are about a comprehensive, structured and organised approach to development. Unfortunately, we are lacking on that here.” 

"South Africa records up to 18,000 murders, 24,000 attempted murders and 250,000 incidents of serious bodily harm every year"

Despite its self-proclaimed ‘rainbow nation’ status, South Africa is rife with issues for insurers. Petty theft, fraud and violent crime rates are among the highest in the world. With a population of just 47 million, South Africa records up to 18,000 murders, 24,000 attempted murders and 250,000 incidents of serious bodily harm every year. There are up to 10,000 deaths a year on South Africa’s roads, most of which are caused by deficient driving standards and poorly maintained, and often unlicensed and uninsured, vehicles.

South African sources say these figures should be taken in context, citing the success of the 2009 FIFA Confederations Cup, which was hosted in four South African cities, with 600,000 people attending 16 matches. Only 39 incidents of serious crime that could be directly linked to the events were reported during that tournament, according to Deputy National Police Commissioner Andre Pruis. Malan Jacobs, administrator of the South African web site www.truecrimeexpo.co.za, noted “Analysis of crimes reported in and around the stadiums during the two weeks of the Confederations Cup showed a dramatic decrease in serious crimes such as murder, attempted murder, robbery aggravated, theft of motor vehicles and sexual assaults.” In addition, sources state that the policing and security strategies deployed during the Confederations Cup will be used even more effectively during the World Cup – South Africa is investing 1.3 billion rand in policing the tournament, with up to 700 police officers, backed up by armed private security guards, patrolling every fixture.

South Africans themselves are most commonly the victims of crime, with relatively few serious incidents involving foreign visitors, and the UK Foreign and Commonwealth Office (FCO) says the risk to visitors travelling to the main tourist destinations is low. However, the FCO does note – along with the Australian Department of Foreign Affairs – that there are high-crime areas that should be avoided by visitors, including the inner city Berea and Hillbrow districts of Johannesburg, and the townships of the Gauteng region. “In comparison to other tourist destinations, claims from tourists to South Africa are relatively small, although they can be expensive for medical emergencies”, said Mike Webb.

heyafricaRisks and opportunities

Perhaps the travel insurance industry should see the 2010 World Cup less as a challenge, more as a welcome opportunity to highlight the importance of buying adequate cover. Certainly, government departments such as the UK Foreign and Commonwealth Office are actively supporting such efforts. “For anyone thinking of travelling to the World Cup in South Africa … it is essential that they take out adequate travel insurance, not least, because unlike the last World Cup in Germany, there is no automatic free medical provision for EU citizens in South Africa,” said Endsleigh spokesperson Gillian Prichard. Commenting on the relevance of its Independent Traveller policy for those planning on travelling around a large country such as South Africa during the World Cup, Prichard said: “Cover for insolvent accommodation providers and airlines as well as lost or stolen possessions, a 24 hour claims helpline and full emergency medical cover will all be important come June 2010.”

The UK Foreign and Commonwealth Office has launched a ‘Be on the Ball’ campaign, aimed at helping England fans travelling to South Africa. “South Africa is an unfamiliar destination for many, and the FCO is urging that those planning to travel follow some basic tips to help them have a safe and enjoyable stay,” an FCO spokesman said. The FCO has produced a dedicated advice page on its website (www.fco.gov.uk/worldcup) with information from rules of the road to accommodation issues and transport advice. This will be updated regularly as the World Cup approaches. 

Foreign and Commonwealth Office Minister Chris Bryant has underlined the need for fans to take out adequate insurance. “It is crucial that those planning to travel to the region are aware of what measures they should take to stay safe,” Bryant said. “Taking a few simple steps such as visiting the FCO website to research the destination, as well as taking out appropriate travel insurance in case something does go wrong can make all the difference between an experience to remember and one to forget.”

"hospital treatment in South Africa’s larger cities is good, but healthcare facilities are more basic in rural areas, where air evacuation to major cities is often the only option for medical emergencies"

The FCO is particularly worried that a combination of the current economic climate and the cost of flights to South Africa means that more fans will be cutting corners and will decide against taking out adequate travel insurance. “This could have financially ruinous consequences - a fan suffering a broken leg in South Africa could face costs of up to £15,000 in medical bills and repatriation”, the FCO pointed out.

Logistical issues

Violent crime – especially when it involves white tourists at a high profile sporting event in a developing nation – is always a headline grabber.

But, many more claims are likely to arise from much more mundane causes, such as petty theft and problems with transport and accommodation.

The UK Foreign and Commonwealth Office reports that out of around 460,000 British visitors to South Africa annually, only a handful were victims of violent crime, but passport theft was common, with almost 900 British visitors reporting stolen or lost passports.

In June and July, World Cup matches will be held at nine venues across a country with a land area of more than one million square kilometres, and inevitably some visitors will experience delayed or cancelled travel arrangements within South Africa.

Equally inevitably, there will be claims by clients who arrive to find that the room they have booked is already occupied. Accommodation is at a premium, and it is an open secret that hotels in many cities have hedged their bets against no-shows by overbooking. Tourism minister Marthinus van Schalkwyk has gone on the record as saying that South Africa will be able to handle the surge in international visitor numbers as well as domestic tourists during the event. “FIFA requires 55,000 graded rooms a night for the FIFA family during the tournament. South Africa has over 100,000 graded rooms in the country and hundreds of thousands of ungraded rooms,” van Schalkwyk stated. Much of the accommodation available is, however, outside of the nine host cities, so fans will be shuttled from satellite accommodation areas to the key venues on match days, while some fans will stay in neighbouring countries, such as Swaziland and Botswana.

FIFA spokesmen have pointed out that similar arrangements were in place during the 2006 tournament, with many fans travelling to the FIFA World Cup in Germany from neighbouring countries on match days. But, distances between the South African venues are significantly greater, and the country’s transport infrastructure is not on a par with Germany’s.   

Illness and medical evacuation

South Africa has, perhaps, the best health care infrastructure on the African continent – at least, for those with private medical insurance. It also has excellent medevac and emergency medical treatment facilities for the adequately insured, and according to BUPA International it is South Africa’s leading destination for medical evacuations. This infrastructure is unlikely to be overtaxed during the World Cup. But this is still Africa, and an adequate level of medical cover is, arguably, even more important than for travel to a similar event in a European destination. “Tuberculosis, rabies, malaria and cholera are all diseases that are common in South Africa. We always advise travellers to seek medical advice before embarking on their trip to ensure that all appropriate vaccinations are up to date,” said Mondial Assistance’s Mike Webb.

Hospital treatment in South Africa’s larger cities is good, but healthcare facilities are more basic in rural areas, where air evacuation to major cities is often the only option for medical emergencies, Webb pointed out. High levels of HIV infection continue to be a huge issue, with some sources estimating that as many as one in four South Africans carry the virus. But, as deputy health minister Molefe Sefularo, has pointed out, the South African Blood Transfusion Service leads the field with its technology, and South Africa has some of the world’s toughest guidelines for blood donation and acquisition. Sefularo’s department heads up a World Cup technical task team of 15 expert work groups which focus on areas including emergency medical services, communicable diseases, environmental health, port health, stadiums, provision of primary healthcare and establishment of command and control points.

"perhaps the travel insurance industry should see the 2010 World Cup less as a challenge, more as a welcome opportunity to highlight the importance of buying adequate cover"

“There is collaboration with the South African National Defence Force in providing the necessary back up for emergency events,” Sefularo said. “There is also collaboration with the South African Red Cross Society in terms of support for aero-medical transportation in cases of need. There is no doubt that the experience provided by the FIFA Confederations Cup will contribute vastly to ensuring a world-class health and medical services in 2010.”