North America and Western Europe Sports Insurance Market | 2031

Report Description

North America and Western Europe Sports Insurance Market Outlook

The North America and Western Europe Sports Insurance Market was valued at USD 14,836.7 Million in 2022 and is projected to reach USD 30,028.1 Million by 2031, expanding at a CAGR of 8.6% during the forecast period. Sports insurance is a special type of financial product that is designed to provide coverage for sports leagues or sports agencies.

Sports insurance protects the policyholder financially against accidents, lawsuits, and damages caused during a sporting event. Increasing participation in sports activities, ranging from recreational to professional sports, is contributing to the growth of the sports insurance market. Professional athletes are recognizing the need of sports insurance in case of accidents or injuries.

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Macro-Economic Factors

Economic growth:

The expansion of the sports industry is one of the major factors contributing to economic growth. Economic growth often leads to high disposable income for individuals and households. The sports industry in Western Europe is very large and encompasses various activities, products, and services related to sports and physical activity.

For instance, according to a report by the European Commission, sports accounts for more than 2% of the total GDP of Europe and almost 3% of employment. The EU promotes the economic development of the sports industry, especially through tourism, fitness, media, and education, the four most important aspects of the sports economy.

Furthermore, sports play a key role in the economy in the US, accounting for roughly USD 14.3 billion in direct earnings each year. High disposable income leads to increased participation in sports and recreational activities. This results in a high demand for sports insurance to mitigate risks associated with injuries and accidents.

Global Event:

Major sports events, such as the Olympics and World Cup, create a spike in interest and participation in sports, which leads to increased interest in sports insurance coverage. For instance, the Olympics is a major sports event that attracts millions of viewers and participants from across the globe. It showcases a variety of sports, including those that do not receive much attention, such as archery, fencing, judo, taekwondo, and weightlifting.

These sports involve high risks of injury or damage than other sports, therefore these sports require insurance coverage for the athletes, coaches, teams, and organizers. The Olympics inspire and motivate people to participate in sports or physical activity, either as a hobby or as a career. This, in turn, influences the demand for sports insurance, as people want to protect themselves and their equipment from potential accidents or losses.

Regulatory changes:

Changes in regulations related to liability, safety, and health in sports impacts insurance coverage. It influences the awareness and demand for sports insurance among the sports participants or consumers. For instance, the purchase or renewal of sports insurance policies among participants or consumers increases if the regulations mandate or encourage the use of sports insurance for certain sports or activities.

However, frequent or unpredicted changes in sports regulations, due to changing social norms, environmental conditions, or technological developments, create uncertainty and confusion among sports participants and organizers. This affects the availability and affordability of sports insurance products, as insurers have to adjust their pricing to account for these changes. This, in turn, influences the demand for flexible and adaptable sports insurance solutions that accommodate these changes.

North America and Western Europe Sports Insurance Market Dynamics

Market Driver- Government Initiatives to Promote Sports Participation

Governments in North America and Western Europe are encouraging sports participation through various programs, such as the construction of sports facilities, organization of sporting events, and funding. This is leading to an increase in the number of people participating in sports and physical activities, thereby driving the demand for sport insurance.

For instance, in Canada, the federal government announced $8 million in funding for the Canadian Parks and Recreation Association (CPRA), as part of an initiative to remove barriers and increase sport participation for underrepresented groups across the country. Similarly, in the UK, the government has announced a Sport Recovery Package of £300 million to support major spectator sports affected by the COVID-19 pandemic.

The package aims to protect the immediate future of sports, such as rugby union, horse racing, football, cricket, tennis, and others. The package also includes £100 million to support the construction and maintenance of local sport facilities across England. These instances demonstrate how governments in North America and Western Europe are encouraging the growth and sustainability of sports and physical activities in their respective regions.

As a result, many people are likely to engage in sports and physical activities, which increases their exposure to potential risks and liabilities. Thus, sport insurance becomes an essential service that protects them from financial losses and legal concerns resulting from sports-related incidents. This factor is boosting the demand for sports insurance.

Market Driver - Increasing Need of Risks and Coverage for Fastest Growing Sports

Rising participation in sports and viewership boosts the risk of injuries or accidents during sports events. Individuals, players, and sports organizations are becoming aware of these risks, making sports insurance a critical component in mitigating potential financial losses. For instance, the demand for sports insurance is increasing in the US, due to the significance of sports in the country.

Athletes, including amateurs and professionals, are increasingly seeking insurance to safeguard themselves against injuries that jeopardize their careers. High-profile instances, such as career-ending injuries in the NFL, have highlighted the value of sports insurance. For another instance, there has been a increasing risks and coverage needs for the America’s fastest growing sport that are  pickleball.

According to the Sports and Fitness Industry Association (SFIA) and Pickle heads, more than 36 million Americans play pickleball and the sport has experienced a participation growth of more than 150% during the past three years. In addition, as per USA Pickleball, the national governing body for the sport, there has a growth in the number of facilities across the U.S during 2022.

The growth is subjected to the increasing number of facilities, 10,720 pickleball facilities with an average of nearly 130 courts opened. Similarly, in Europe, where football is a popular sport, clubs and organizations have recognized the necessity for insurance to cover the salaries of players in case of injuries.

Market Driver - Growing Demand of Sports Insurance

High level of sport involvement in North America and Western Europe, including organized sport leagues, amateur activities, and recreational sports, creates a significant need for sports insurance. Many people participate in sports, which increases the necessity for coverage against potential injuries and accidents.

North America is home to numerous professional and amateur sports leagues, associations, and clubs, including the Major League Baseball (MLB), National Football League (NFL), the National Basketball Association (NBA), the National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA). These organizations require extensive and customized sports insurance plans to protect their players, staff, assets, and reputation from a variety of risk and liabilities.

Similarly, Western Europe registers strong demand for sports insurance, as it is home to some popular and competitive sports events and teams, including the FIFA World Cup, UEFA Champions League, Wimbledon Championships, and Tour de France.

Furthermore, Western Europe has a strong culture of physical exercise and wellness, as well as a supportive policy environment that encourages involvement in sports by all segments of the society. Many individuals participate in sports, which boosts the need for coverage against potential injuries and accidents.

Market Restraint - Complexity of Policies

Complex sport policies are difficult to understand fully, as these policies often use jargon and technical language that is difficult for potential customers to understand. This lack of transparency makes it difficult for people and organizations to assess the value of the coverage being purchased.

Policyholders who are unsure about the insurance coverage are hesitant to enroll in sports insurance, worrying that the necessary protection would not be provided if a sports-related incident occurs. Complex policies have high premiums in some circumstances, due to additional administrative overhead costs. This makes sports insurance less affordable, further reducing its demand. Complexity of these policies lead to delayed claims, misunderstandings, and dissatisfaction among policyholders, thereby reducing the overall demand for sports insurance.

Market Restraint - High Cost of Premiums

The expense associated with comprehensive sports insurance policies restrains the market growth. These policies often cover a wide range of potential risks, such as athlete injuries, property damage, and event cancellations. High premium and administrative costs associated with such coverage deters both amateur and professional sports organizations from investing in insurance.

For instance, a local soccer organization finds the expense of ensuring its players and facilities costly, causing it to forego insurance entirely. Furthermore, the litigious nature in North America and Europe is expected to result in costly liability claims, driving up the insurance costs. High cost of sports insurance poses financial barriers for both individual athletes and organizations, potentially limiting access to athletic events, which affects the overall market demand.

Market Opportunity - Expansion of Sports Industry

The sports industry is expanding rapidly, with the continuous formation of new leagues and teams. This is creating opportunities for sports insurers to cover athletes, teams, and leagues. The sports industry has registered an increase in participation, sponsorship, and investment, which has resulted in increased risk exposure. Major events, such as the Olympics, FIFA World Cup, and high-stakes tournaments, have attracted substantial financial backing.

The 2026 FIFA World Cup, for instance, is expected to be held in North America, with billions of dollars invested in stadiums, infrastructure, and sponsorships. Such large-scale events necessitate adequate insurance coverage to protect against unforeseen disruptions, such as natural disasters or civil disturbances. In addition, the increasing investment, viewership, media coverage, and other factors are encouraging the women’s professional sports.

Women’s leagues are gaining addition opportunities as innovative approaches has been taken into consideration to sponsor women’s sports. For instance, there has been a shift in the global excitement for the 2023 "FIFA Women's World Cup" in the year 2023, 41% of global population was interested for the league as compared to the previous league scheduled in 2019.

As in the 2019 FIFA Women’s World Cup, only 34% was the interest rate of the global population was observed. The increasing trend has been observed and thereby, market is accounted for the lucrative opportunities.

Scope of the Report

The report on the North America and Western Europe Sports Insurance Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

North America and Western Europe Sports Insurance Market Segmental Outlook

The North America and Western Europe Sports Insurance Market is segmented on the basis of by Coverage Type, By End-user, By Sales Channel, and By Region.

On the basis of coverage type, the North America and Western Europe Sports Insurance Market is segmented into Property Insurance, Liability Insurance, Accident Insurance, Special Events Insurance, Camp & Tournament Insurance, Premise & Spectator Insurance, Liquor Liability Insurance, Motor Sports Insurance, and Others.

The property insurance segment is expected to hold a significant market share during the forecast period, owing to the increasing participation of people in sports activities and rising risk of property damage in sports-related activities.

The liability insurance segment is projected to expand at a significant CAGR during the forecast period, due to the rising awareness of third-party liability insurance, increase in sports business activities, and urbanization.

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In terms of end-user, the Sports Insurance Market bifurcated into Individual and Commercial. The commercial segment is expected to hold a significant market share during the forecast period. Many sports organizations are required to have sports insurance in order to comply with regulatory regulations and ensure the safety and well-being of participants and spectators. This drives the demand for sports insurance, thereby boosting the segment in the coming years.

Based on the Sales Channel, the North America and Western Europe Sports Insurance Market is segmented into direct sales and indirect sales. The indirect sales segment is expected to hold a significant market share during the forecast period. Indirect distribution channels involve the sale of products or services through one or more intermediaries, such as insurance brokers or agents. Indirect distribution channels offer a wide reach, access, and convenience; however, they involve sharing profits, losing control, and facing competition.

Regional Outlook

On the basis of region, the North America and Western Europe Sports Insurance Market is divided into North America, Western Europe. North America region is expected to hold a significant share of the sports insurance market. The growth of the market is attributed to the increasing participation in sports & recreational activities, rising awareness of sports injuries, and growing demand for the customized sports insurance products in the region.

Many sports organizations in this region mandate the purchase of sports insurance for professional and amateur players, thereby fueling the demand. Furthermore, the presence of prominent insurance providers, coupled with the high disposable income of consumers, accelerates the market expansion in North America.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the North America and Western Europe Sports Insurance Market

• Historical, Current, and Projected Market Size in terms of Value

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on North America and Western Europe Sports Insurance Market