Zurich Insurance Group promotes itself as "one of the world's most experienced insurers".
Author
Annette Greenhow
Assistant Professor, Faculty of Law, Bond University
It proudly markets its ongoing commitment to sport through partnerships including with the Melbourne Football Club's men's and women's AFL teams, with the Zurich logo featured prominently on player jerseys.
When it comes to the business of providing insurance cover for future professional athletes for concussion-related injuries, the announcement last week of Zurich's decision to no longer include concussion injury claims under its active policy in high-contact professional sports tells a different story.
What did the Zurich policy cover?
Like everything with insurance policies, the detail is often found in the fine print.
Without access to the exact policy wording or product disclosure statement in the AFL case, we can only go by what has been publicly reported.
Zurich Active is a life insurance policy described as a "uniquely severity-based policy with an extensive list of covered health events".
Put simply, this hybrid policy combines trauma and life insurance to provide cover for injuries falling within the parameters of the listed "active health events", subject to meeting eligibility requirements.
Payouts vary according to severity and include one-off single payments (lump sum) and multiple claims.
Until recently, concussion-related injuries appeared to have been included as part of a "defined health event".
The newly announced concussion exclusion is far-reaching, extending to withdrawal of cover so "no benefit will be payable for any claim where the condition or event giving rise to the claim is directly or indirectly related to concussion or traumatic injury, including compensation".
This includes chronic traumatic encephalopathy (CTE), post-concussion syndrome or any other future diagnosis linked to head trauma.
The impact on athletes and the entire sports community
A closer look at reporting on Zurich's announcement shows this is not just an AFL issue but appears to impact other "high-contact professional sports" such as rugby and boxing.
At this stage, it appears the concussion injury exclusion affects only the Zurich Active policy covering professional players.
According to reports, Zurich has advised that other policies - such as the AFL Players Association (AFLPA) group policy covering total and permanent disablement insurance cover arranged through its superannuation fund for AFL players - are not impacted by the decision.
But even if other policies remain unaffected for now, what message does this decision send to the wider sporting community?
Concerns from players' agents, football commentators and others suggests this decision could have far-reaching impacts, sounding alarm bells that professional players are now left with even fewer options for compensation and support if they are impacted by concussion.
Unlike most workers, the vast majority of professional athletes are excluded from workers' compensation schemes (in some cases, boxers and jockeys are covered).
At the 2023 Senate Inquiry on concussion and repeated head trauma in contact sports, the AFLPA provided details about the range of support mechanisms it makes available to players.
The AFLPA is making inroads in providing support to past and present players, but the organisation has limited resources and depends on financial support from the AFL.
Although these are positive measures, the AFLPA alone is unlikely to be in a position to cover the volume of claims and long-term costs.
Insurance is pivotal for sports
Perhaps the most concerning voice of all comes from the insurance industry itself.
The Insurance Council of Australia (ICA) submitted to the 2023 Senate Inquiry that:
the availability of insurance, particularly public liability insurance, is critical to ongoing sports participation at all levels.
The ICA cautioned that for the vast majority of sporting clubs and organisations the "absence of the financial protection provided through insurance would mean they could no longer continue to operate".
In sum, this means no insurance, no sport.
Why now?
According to media reports, Zurich reviewed its Active Policy "in line with medical developments".
Excluding concussion-related injuries from its policy was driven by "the uncertain health impacts and risks associated with concussion events and the subsequent development of chronic traumatic encephalopathy (CTE)".
But other events may have also influenced this decision.
The high cost of these injuries is now well and truly out of the shadows.
In 2022 former North Melbourne and Melbourne player Shaun Smith received a A$1.4m payout after insurer MLC assessed his claim under his personal policy, organised decades earlier through his superannuation.
Smith's medical report showed he had suffered total and permanent disablement due to "brain injuries resulting from head knocks".
Over the past year, reports suggest at least three other players have received million dollar lump sum payouts.
The actuaries have crunched the numbers and likely saw an upward trajectory in evaluating risk and payouts.
What's next?
The takeaway message from the Zurich decision is clear - concussion is no longer in the shadows. The costs and impacts are now on display for all to see.
Professional athletes are putting their bodies and brains on the line but only have limited support mechanisms available.
Putting the ICA concern in the wider context that no insurance means no sport, there is no time to waste.
The 2023 Senate Inquiry recommended professional sports work on addressing insurance coverage for their athletes and that state and territory governments engage with professional sporting organisations to review the workers' compensation schemes.
The federal government's response to the Senate Inquiry report will help provide much-needed clarity and a plan for the future including how to fill the gaps if other insurers decide to follow Zurich's lead.
Annette Greenhow received funding as part of a Partnership Development Grant administered by the Canadian Social Sciences and Humanities Research Committee. She is affiliated with the Australian and New Zealand Sports Law Association. Views are her own.
