The Zurich Insurance Group describes itself as “one of the most experienced insurers in the world”.

The company proudly markets its ongoing commitment to the sport through partnerships including with the Melbourne Football Club men’s and women’s AFL teams, with the Zurich logo prominently featured on players’ jerseys.

When it comes to insurance coverage for concussion injuries for future professional athletes, Zurich’s decision, announced last week, to no longer cover concussion injury claims in its active policy for professional sports with a lot of physical contact, tells a different story.

What did the Zurich policy cover?

As with anything related to insurance policies, the details are often found in the fine print.

Without access to the exact wording of the policy or the product information statement in the AFL case, we can only rely on what has been publicly reported.

Zurich Active is a life insurance policy described as a “unique severity-based policy with a comprehensive list of covered health events.”

Simply put, this hybrid policy combines trauma and life insurance to provide coverage for injuries that fall within the parameters of the listed “active health events,” subject to eligibility requirements being met.

Payouts vary depending on severity and include one-time payments (lump sum) and multiple claims.

Until recently, concussion injuries seemed to be classified as part of a “defined health event.”

The newly announced concussion exclusion is far-reaching, going as far as withdrawing insurance coverage so that “no benefit or damages will be paid for claims where the condition or event giving rise to the claim is directly or indirectly related to a concussion or traumatic injury.”

These include chronic traumatic encephalopathy (CTE), post-concussion syndrome, or any other subsequent diagnosis related to head trauma.

The impact on athletes and the entire sports community

A closer look at the coverage of the Zurich announcement shows that this is not just an AFL issue, but that it also appears to have implications for other “professional contact sports” such as rugby and boxing.

At this point, the concussion exclusion appears to only affect the Zurich Active policy for professional players.

Zurich has reportedly said that other policies – such as the AFL Players Association (AFLPA) group policy, which provides total and permanent disability insurance for AFL players through its superannuation fund – would not be affected by the decision.

But even if other policy measures remain unaffected for now, what message does this decision send to the wider sporting community?

Concerns raised by players’ agents, football commentators and others suggest that this decision could have far-reaching consequences, raising concerns that professional players will now have even fewer options for compensation and support if they suffer a concussion.

Unlike most employees, most professional athletes are excluded from workers’ compensation systems (boxers and jockeys are covered in some cases).

At the Senate Inquiry into Concussion and Repetitive Head Injury in Contact Sports in 2023, the AFLPA provided details of the various support mechanisms it provides to players.

The AFLPA is making progress in supporting former and current players, but the organisation has limited resources and is reliant on financial support from the AFL.

While these are positive measures, it is unlikely that the AFLPA alone will be able to cover the volume of damage and the long-term costs.

Insurance is crucial for sport

Perhaps the most worrying voice comes from the insurance industry itself.

The Insurance Council of Australia (ICA) submitted the following to the 2023 Senate Inquiry:

Taking out insurance, especially liability insurance, is crucial for continued participation in sport at all levels.

The ICA warned that for the vast majority of sports clubs and organisations, the lack of the financial protection offered by insurance would mean that they would be unable to continue their activities.

In summary, this means: “No insurance, no sport.”

Why now?

According to media reports, Zurich has reviewed its Active Policy “in line with medical developments.”

The exclusion of concussion-related injuries from the policy was due to the “uncertain health effects and risks associated with concussions and the resulting development of chronic traumatic encephalopathy (CTE).”

But other events may also have influenced this decision.

The high costs of these injuries have now finally disappeared from the shadows.

In 2022, former North Melbourne and Melbourne player Shaun Smith received a payout of A$1.4 million after insurer MLC reviewed his claim under his personal policy taken out decades earlier through his superannuation plan.

Smith’s medical report stated that he had suffered total and permanent disability due to “brain injuries resulting from blows to the head.”

At least three other players reportedly received lump sum payments worth millions last year.

The actuaries have analyzed the numbers and likely found an upward trend in the assessment of risks and payouts.

What happens next?

The message from the Zurich ruling is clear: concussions are no longer a shadowy issue. The costs and effects are now visible to all.

Professional athletes put their bodies and minds on the line but have limited support mechanisms at their disposal.

When you put the ICA’s concerns into the wider context that no insurance means no sport, there is no time to lose.

The 2023 Senate Inquiry recommended that professional sport look at insurance coverage for its athletes and that state and territory governments work with professional sport organisations to review workers’ compensation systems.

The federal government’s response to the Senate’s investigation report will help provide much-needed clarity and a plan for the future, including how to close the gaps should other insurers decide to follow Zurich’s example.