Secondary lotteries link the prize awards they offer to the underlying official lottery. Even the biggest secondary lottery providers do not generate enough revenue to payout the occasional large jackpot. For a premium, the operator can offload the liability to pay winnings above a chosen threshold to the insurers. This makes the operator’s cashflow less volatile, more planable and is the security net to protect the operator from insolvency.
Conceptually, instant win games are simply lottery draws which are organized for each individual player. The issue for the operator is apparent: the volatility of winnings can be substantial as it is possible that there are multiple winners with large prize awards within a short time. Consequently, they limit their liability by offering relatively small top tier winnings. Insurance cover allows operators to offer higher prize awards which in turn boosts sales while keeping the financial volatility low.
In going concern mode, primary lotteries with significant volume do not require insurance; they generate enough cash to allocate a fraction of their sales to a pool from which they pay the large winnings. What if they are starting a new game and the prize pool is empty? Or they want to push sales with innovative features? Insurance products can support advanced financial management to smooth the P&L.
Sport is exciting but also competitive, big business. Clubs, event organizers and sponsors offer outstanding individuals or teams performance-based financial incentives. To get access to outstanding individuals our clients take significant financial risks. These have to be carefully managed in order not to seriously reduce the client’s financial flexibility.
Fortanach has a range of solutions to reduce your risk and increase financial stability.
The policies use a reference currency in which the premium is charged and the claims are paid. Bets which the operator accepts in another currency have to be converted with a well-specified foreign exchange rate into the reference currency.
Yes, as long as there is a common ownership structure, i.e. all entities have the same majority shareholder.
Yes. The RNG has to satisfy certain criteria.
If your policy does not include a reinstatement then as soon as the sum of all claims reaches the sum insured, the policy no longer provides cover.
It is possible to negotiate a reinstatement which acts to “refill” your cover up to a certain amount.