Media executives have warned TV and film productions in the UK will be at risk from a government decision to end a pandemic program aimed at providing reassurance to the industry.
Ministers decided to halt the program to restart film and television production at the end of April, officials say, despite arguments from the insurance industry in meetings in recent days that the commercial market was not ready with alternative products.
The program was launched in 2020 to help productions stopped or delayed by the lack of insurance for Covid-related risks and was extended as the health crisis continued. It helped provide financial confidence should future losses be incurred due to pandemic illnesses or forced shutdowns and was widely hailed as a success.
Media executives have warned that the decision to shut down the program now risks halting productions in Britain planned for this year.
Brokers say insurers need time to develop policies that can accommodate the government’s ‘living with Covid’ strategy unveiled in February, and that a lack of standard industry practice to deal with the variant less severe of Omicron makes the potential risk too great to guarantee.
John McVay, chief executive of Pact, the UK film and television trade association, said that while the insurance industry was not yet ready to cover the hundreds of shows in production in the UK, “it is inevitable that some productions will not be able to hedge, which means that financiers cannot release money”.
Tim Thornhill, director of entertainment and sports at insurance broker Tysers, said: ‘Government intervention has allowed the TV and film industry to thrive over the past two years. The closure of this scheme seems premature as there is currently no comparable alternative in the commercial insurance market.
Insurance industry executives have been locked in talks with officials from the Department for Digital, Culture, Media and Sport over the past few days.
“He’s generated so much revenue and revenue and jobs, why stop him?” said Richard Moore of Media Insurance Brokers, a specialist in underwriting insurance for production companies.
Trade groups including the British Insurance Brokers’ Association and the London & International Insurance Brokers’ Association have been pushing for the government to extend the scheme until September, according to people familiar with the matter.
This would align with the end of the government’s event insurance scheme, launched last summer.
Lloyd’s Market Association, the British Insurance Brokers’ Association and the London & International Insurance Brokers’ Association said in a joint statement: ‘Brokers, underwriters and their customers are in active discussion with the government about how the commercial market could start providing coverage for that again. difficult risk.
The government said brokers and insurers would work “with the film and television industry to manage risk so productions can move forward without the taxpayer needing to intervene”.
He added that “the risk to productions posed by the coronavirus is greatly reduced and total production stoppages are much less likely to occur. . . as a result, the government is now convinced that it no longer needs to intervene in this market”.
The global insurance industry has stopped insuring Covid-related disruptions after suffering huge losses in 2020.
“Conversations are now about getting insurers to take on the risk,” Moore said. “At the moment, there don’t seem to be any takers.”
Some brokers are also frustrated by the apparent lack of cost to the Treasury to continue helping the sector given that each production has to pay a royalty of 2.5% of its budget.