The accident and health (A&H) market is facing potential losses in the tens of millions stemming from injuries to National Football League (NFL) stars Dak Prescott and Deshaun Watson.
Sources said the exact quantum remains unknown, as the eventual payout will depend on how long the NFL stars remain out of play, and that the claims could go on for another couple of years.
They said the policies are written through MGA Pro Financial Services (PFS), fronted by Everest, and reinsured in London and Bermuda.
In the London market, the largest writers of the policies are Everest Syndicate and Canopius, sources said.
In October 2024, Cleveland Browns quarterback Watson suffered an Achilles injury causing him to miss the rest of the 2024 season.
In January, he underwent a second surgery after tearing his right Achilles tendon again and is likely to miss significant time during the 2025 season, according to news reports.
In November last year, Dallas Cowboys quarterback Prescott was ruled out for the season due to a hamstring injury.
The month prior, the Cowboys signed Prescott to a four-year, $240mn contract, the biggest contract in NFL history.
News of the Watson and Prescott losses follows the $40mn loss the market faces from the accidental death of National Hockey League star Johnny Gaudreau, as revealed by this publication in October last year.
We also revealed that there is another potential individual disability insurance loss of $40mn relating to a physician being unable to perform the duties of their occupation.
The US sports disability market has been dubbed a “problem child”. Sources said the market was very volatile, with sums insured increasing over the years, but too little premium for when big claims come in, sources said.
A broker added that, in the London follow market, sums insured might be anywhere between $2.5mn to $5mn per player, while some markets have significant reinsurance behind them, writing multiples of that per player.
The highest contracts awarded to a handful of elite US sportsmen are well in excess of $100mn.
“The attrition in the US sports market used to be between $1mn-$2mn, but now it’s upwards of $10mn,” said a source, adding that it consists of just a tiny pool of about 25-30 high-value insureds because most franchises only buy this product for one or two players.
Given the high attrition, rates and deductibles have gone up, but it remains to be seen, one source said, if the market has got it right.
“The viability of US sports disability in its current product guise is questionable,” the source said.
“The happy middle ground of us hitting 35% to 40% gross loss ratios is like hitting a bullseye from the back of the hall, not six feet.
“What it will lead to is product development around what the franchises need and want, not just this annual throw-of-the-dice approach we’re in at the moment.”
PFS and Everest were reached for comment.