The insurer warned the sector ‘must continue to evolve’
Allianz has warned that the movie and live events business has yet to fully recover following the Covid-19 pandemic and needed to evolve in a new environment driven by economic, technology and sustainability risk trends.
“The entertainment industry had a very positive year in 2022 and a welcome recovery is definitely underway, but we are not out of the woods yet,” Michael Furtschegger, global head of entertainment at Allianz Global Corporate and Specialty (AGCS), said.
“In the three years since coronavirus first hit the headlines, the world has changed,” he added.
“The sector must continue to evolve in line with new technologies, proliferating platforms, seismic shifts in patterns of consumption, as well as changes in the public mood, particularly among younger generations.”
Furtschegger added that economic trends such as rising costs and staff shortages have continued to be prevalent in the entertainment sector.
He explained that AGCS’ entertainment clients had felt the effects of inflation, including “increased production and live event costs”.
“Staffing costs have risen following the skills shortage that occurred in the wake of the pandemic when many left the industry,” Furtschegger added.
“Venues are scarcer than they were because there are still many shows postponed from the pandemic that need to take place, in addition to new events and festivals.
“Bigger events may be thriving, but smaller events are more challenged by factors such as venue, transportation and energy costs.”
Allianz also said health and safety protocols, increasing weather hazards and crowd safety were “some of the key risk concerns that the entertainment industry needs to monitor closely”.
“The Covid crisis and the recent tragic shooting incident on a film set have shown that the industry needs to remain vigilant about its health and safety protocols,” Furtschegger said.
“We’re seeing more abnormal weather related events – heavy storms and flooding in Europe and bushfires in California, for example.”
The insurer’s warning comes as Allianz revealed AGCS had insured five of the 10 movies nominated in the Oscars’ Best Picture category in 2023.
Despite the headwinds, the insurer noted that consumers were heading back to entertainment venues “in encouraging numbers”.
According to Gower Street Analytics, global box office receipts hit $25.9bn (£24.4bn) – while this is 35% behind the average for the three years before the pandemic, it is a 27% gain on 2021.
- Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.21 = £1, which was correct as of 1 March 2023.