AGCS

Insuring half the Best Picture nominees at the Academy Awards this year, AGCS has earned its place in the front row of risk-managing movie productions, with a heritage that goes back to the early days of celluloid.

The Oscars will return to (show) business as almost usual on Sunday March 27, 2022, after two years of Covid-related modifications and three years without the customary wisecracking hosts. Having decamped in part to the Union Station in Los Angeles last year, the 94^th Academy Awards will be firmly rooted back at its regular haunt, the Dolby Theatre, for a ceremony that will be emceed by comedic powerhouses Regina Hall, Amy Schumer and Wanda Sykes.

The trio marks the first all-female line-up in the event’s history and represent an industry that has been shocked into change, like so many others over the last couple of years. As Covid-19 lockdowns halted film productions and closed movie theaters around the world, new technology and streaming services were changing the way films were seen and enjoyed. As a result, five out of the 10 Best Picture nominees were pure streaming or hybrid releases (available to stream and in movie theaters on the same day) and five were purely theatrical releases.

Although the film industry has been through a time of tumult, moviegoers are returning to theaters with more confidence as Covid restrictions have been lifted. Global cinema box office totaled $21.4bn in 2021, according to Gower Street Analytics – that’s 78% more than 2020, but still less than half the $41.3bn average of the three pre-pandemic years from 2017 to 2019. The industry is not expected to return to pre-pandemic box-office levels until at least 2023.

Rolling with the changes

AGCS has been a witness to Hollywood history during its 100 years of insuring blockbusters, from silent slapstick comedies like the Keystone Cops to the visual wizardry of the Harry Potter and Marvel films. The company has insured every James Bond film to date, including No Time To Die, which is up for three Oscars this year – Best Visual Effects, Best Sound, and Best Original Song. AGCS also underwrote the Iowa cornfields in Field of Dreams and the treasures of the Louvre in The Da Vinci Code. This year, continuing its long-standing connection to the film industry, it is insuring five of the Best Picture nominees, which have garnered nearly $550m* of box-office receipts and 31 Oscar nominations between them.

“The AGCS link to the film industry goes as far back as the 1900s, with the movies of Charlie Chaplin,” says Wanda Phillips, Head of North America Entertainment Insurance, AGCS. “We have adapted to change along with the moviemakers. With visual effects now such a major part of the movie-going experience, we have honed our underwriting expertise to cover the complexities of digital technology. But we’re not just an insurer of choice for the big-hitting mega-releases. We’ve also insured thousands of arthouse and independent films, TV shows and documentaries, as well as commercials, photography, and post-production, which would take in things like CGI [computer-generated imagery]. We will be rooting for all our entertainment clients when those magical envelopes are opened on Oscars night.”

Premium productions

Depending on the genre of a film, its insured budget, deductibles and other risk factors, insurance premiums can range from 0.7% to 1.5% of the total budget – that would be $1.4mn-$3mn on a $200mn movie.

There is not much hard data available on insurance figures, but Hollywood accounts for the most premiums, estimated to be around $400mn-$500mn a year, followed by the UK with approximately $60mn-$70mn. China, at $45mn, is growing, as are France and Germany, each with about $25-30mn total market premium.

As well as full-length movies, AGCS insures post-production facilities, TV shows and ‘DICE’ productions – documentaries, industrial, commercial, and educational productions. 

Action-packed and fraught with risk

The AGCS Entertainment Insurance team play more than just a cameo role in the movie-making process. Without insurance, many films simply could not make it to our screens. Before underwriting a film, scripts must be read and locations assessed. Some productions are so complex a risk engineer will be sent to the set to check out risks in situ, because if things depart from the script on a big-budget action blockbuster, there could be thrills and spills off screen as well as on. Pyrotechnics, explosions, car chases and stunts are potentially perilous operations, and insurers must take them into account when assessing risks, as well as potential injuries, illness, and medical histories.

Add animals into the mix , costly delays, or the particular risks of shooting in certain locations, with moving machinery, and you have a potent cocktail of potential mishaps, or worse, that could afflict cast and crew. Then there are delays to production, damage to sets, equipment or costumes, and weather events to factor in. Even after a film has ‘wrapped’, there are post-production risks to be aware of – a growing area in this age of visual effects and CGI.

For more information see www.agcs.allianz.com/solutions/entertainment-insurance.html