An insurance policy offered by the largest online registration company in the U.S. has provoked a great deal of discussion among race directors and industry insiders.
Last month, Active.com began offering a product known as Registration Protector. Underwritten by Allianz Global Insurance (a company best known in North America for its travel protection plans), the policy protects endurance athletes from common maladies that appear in the days and weeks leading up to a race. This coverage is a considered a “core tenet” of Active’s partnership with an event and will be made available at all future races Active does registration for. The cost is $7 per event; the policy is offered as an option during online registration.
“We’ve been exploring it for probably close to four years,” says Eric McCue, general manager of sports at ACTIVE Network. “We just never could find a vendor that could fulfill our vision of the program quite as well as Allianz could.”
As it stands, Registration Protector covers personal injury and illness, transportation troubles (including flight cancellations), being laid off, losing one’s home in a fire, jury duty, military obligations and even the untimely death of a participant or the registrant’s spouse. Reimbursement of the entry and transaction fees is handled by filing a claim through Allianz within 72 hours of “a Covered Reason occurring,” according to the policy.
“One of the other reasons we’re so excited about it is because it really is what we deem to believe a brand new program as far as the market and the industry is concerned,” McCue says. “We haven’t seen anyone in the States doing it at the type of scale we are.”
Value-Added Benefits (and Detractions)
As the race director for the Reedy River 10-K in Greenville, South Carolina, Joe Lanahan knows he’ll hear complaints about his no-refund policy. It doesn’t matter that it’s clearly articulated on all registration material and that refunds are almost unheard of in road racing.
“You get the question of that refund from less experienced racers,” Lanahan says. “If you’ve been involved in the road racing process and you’ve done this before, it’s pretty understood that race fees are non-refundable. Most [injured runners] see it as a donation.” In the case of the Reedy River 10-K, which is expected to draw upwards of 6,000 runners in 2013, those “donations” go directly to the Greenville Track Club and other non-profit organizations in the county. A significant number of refunds would dramatically affect those programs’ bottom lines.
This exemplifies what McCue calls the “win-win-win” component of Registration Protector: The participant pays little to cover a potential loss; the event director no longer has to deal with lost revenue from refunds or transfers; and Active and Allianz continue to mutually benefit from their partnership. From this viewpoint, Registration Protector becomes a value-added commodity for races to promote.
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“They’re a company that is set up as a for-profit, so they see it as a way to not only offer more service, but also, let’s be honest, a way to make more money,” he says. “I don’t begrudge them that. They’ve established themselves as a very reliable and good resource, especially for the new race director who needs a lot of support the first couple years.”
Jeff Matlow, CEO of imATHLETE, one of Active’s leading competitors, isn’t sure race directors are going to switch online registration companies based on a value-added option. From his conversations with event organizers, Matlow believes “enhancing social engagement and Facebook activity” is a more viable way to increase registration than offering cancellation insurance for an additional fee.
“It seems event organizers see more value in social marketing to grow their events than an insurance up-sell,” he says. “Insurance seems to be viewed as more of a benefit once you're signed up, not a direct reason to sign up for an event.”
Economy of Scale Limitations and Exclusions editor and publisher Phil Stewart. “The only downside is you are giving the online company a large role in dealing with your registrants who are, after all, your customers,” he says. “I would imagine if claims are denied [by Allianz], the registrants are going to focus their frustration more on the event rather than the online registration company.”
For the foreseeable future, Lanahan will continue to deal with no-refund complaints on his own. The Reedy River 10-K has fully embraced Greenville County vendors, including the timing and registration company. Not only does that help keep the dollars circulating in the local economy, Lanahan says, but also ensures he’s dealing with a real person if any last-minute registration troubles arise. As for appeasing the few injured runners not swayed by his “entry fee as charitable donation” argument, there’s always the lure of merchandise.
“Truly, if they get their shirt, most of the time they’re pretty happy,” he says.
McCue seems confident Active has done its homework
While the industry debates the merits of participant insurance, on the surface it appears to offer a good value to the athlete. The relatively inexpensive flat fee, when combined with the diversity of Active’s racing portfolio, means most interested participants will be able to find a race that meets their needs. And, unlike online service and transaction fees, We may earn commission from links on this page, but we only recommend products we back.
That doesn’t mean the plan is foolproof, says Matlow. While Active is rolling out the largest participant insurance offering in terms of scale and scope, several similar attempts in the industry have failed in recent years.
“The insurance companies in those instances abandoned the process because they just weren't making enough money,” Matlow says. “Not enough people were opting in to make it worthwhile. Insurance companies are in the business to make money, so unless there is a critical mass of people opting in, and only a very small percentage of those make claims, it doesn't make sense for them.”
Matlow’s comments underscore some of the basic economic questions surround participant insurance. Will enough athletes in low-cost 5-Ks and 10-Ks pay for this premium, or will it be limited to races costing three figures, such as marathons and triathlons? Will the claims process with Allianz be smooth enough that clients purchase it for multiple races? And will the economics work out so that this becomes a lasting industry standard?
McCue seems confident Active has done its homework.
“It speaks to the point I made earlier about our scale,” he says. “Allianz took a look at the breadth of our customer base [. . .] and were comfortable underwriting it at a singular price point across the entire pool of our customer base.”
McCue declined to comment on the specific economic agreement between Active.com and Allianz, saying only, “Allianz and Active have entered into this agreement because it makes sense to both of us.”
For all his reservations, Matlow believes that Active’s participant insurance could greatly alter the insurance landscape in participatory endurance events. If the offering proves seamless and profitable, “you'll probably see at least the leading companies offering a valuable solution,” he says.
Insurance is Here to Stay
As last month’s cancellation of the New York City Marathon showed, even the best laid plans can fall through when Mother Nature intercedes. Events have typically protected themselves from what insurance providers call “Acts of God” and other major obstacles by purchasing cancellation and liability insurance. Those benefits save the event but do nothing for the participant.
Economy of Scale. As per Allianz’s Certificate of Insurance (PDF), other exclusions include: pregnancy, a change of plans, substance abuse, anxiety disorders, committing a crime, war, nuclear “reaction, radiation or radioactive contamination,” and perhaps most interestingly, operating a plane.
While some of those reasons may seem supercilious, to Cameron Whitehead, a veteran Ironman who has competed on four continents and previously wrote for The 2025 Marathon and Half Marathon Calendar, such exclusions lower the policy’s actual value.
“The new insurance offering is, in my opinion, little more than window dressing,” he says. “It’s standard travel insurance extended to cover a race entry fee, nothing more. Nor does it do anything to deal with the true day-to-day reasons that one may need to withdraw from a race.”
Whitehead, who resides in Amsterdam, cites a personal example of signing up for the 2013 Ironman Texas a year in advance (at the general entry fee of $650), then finding out his wife was pregnant and due two weeks after the race. He opted to withdraw from the event. Although Ironman Texas is hosted by Active.com, Whitehead was not eligible for a registration fee refund. Pregnancy by a competitor or spouse is not covered by Registration Protector. Instead, he took what the event organizer presented: a $150 refund.
“The race was not sold out so I did not take a slot from anybody,” he says. “I just contributed $500 to the [event organizer’s] coffers for transferring $150 back to me. That’s a hefty administrative fee.”
This scenario stands in stark contrast to how major multisport organizations operate in Europe, where almost 50 to 75 percent refunds, deferrals and race transfers are commonplace, even in the last month before an event. Still, Whitehead faults only himself in this matter.
“I know what I’m getting myself in for [when I sign up for these events],” he says. “If I want to race in the United States, Australia, or New Zealand, I suck it up.”
Insurance is Here to Stay
The ripples from Active’s insurance offering extend beyond online registration companies. Events large enough to handle registration in-house are also watching with a close eye. A spokesperson for the Chicago Marathon said the race did not feel comfortable serving as a source for this piece, as “they’re still processing what this type of offering might mean for the event.”
If nothing else, Registration Protector continues a trend of the insurance making its way into the road racing scene in a new way. “Different types of insurance have been a hot topic in the industry for a few years,” says Matlow. “I'm fairly certain that you're going to see more companies offering insurance in the very near future.”
In the meantime, Stewart believes the consumer stands to benefit from this initial offering, “especially with today's escalating entry fees,” he says. “It will be interesting to see what the level of entry fee is that runners feel like they want to protect by buying this insurance.”
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