Race Reimbursement Insurance

Two events, the Denver Triathlon and the C Different Triathlon, announced earlier this week they would be offering "race reimbursement insurance" for athletes in 2012. They are the latest races to partner with 365Competitors, LLC, to provide athletes a guaranteed reimbursement if unable to compete due to injury or illness.

The premise is fairly simple: events partner with 365Competitors for a fee tied to race registration and events pass along the cost and benefit to athletes of insuring their money.

From the athlete point-of-view: This seems like a no-brainer, great idea. If athletes are going to shell out $85-$150 for a race, what's a few more dollars to insure they can take advantage of the experience or they get their money back? Paying $85 with the risk of losing $85, versus paying $95 with no risk of loss certainly seems appealing - athletes would be much less hesitant to register, even at a heightened cost, for a event that offers the opportunity to get a refund if they don't race. On the flip side, could this decrease the commitment level of some athletes? For athletes who are faced with a severe injury or encounter other circumstances that prevent them from racing even if they wanted to, this is a great benefit. For athletes with nagging injuries, coupled with lack of motivation or the training base they would have desired, this may give them an opportunity to bow out when they may have otherwise raced because they had invested the money. It's the "on the fence" athletes to whom this may not be so advantageous.

(For clarification, 365Competitors restricts reasons for not racing to injury or illness of the registrant, specifically "insurance depends upon the participant seeing the physician within a 72 weekday hours of the event and being advised by the physician not to participate.")

From the event point-of-view: Utilizing 365Competitors' offering could provide a variety of benefits, as they clearly point out. Registration numbers may increase, as well as early registration, and the event is perceived to registrants as caring and benevolent compared to the many events that have strict "No refund, no transfer" policies. While registration numbers and revenue may increase, participation percentage numbers could actually decrease if a large number decide not to run, as outlined above, but the stipulations they employ would minimize this result. 365Competitors lays out scenarios by which events can increase revenue and capitalize on the partnership: increase registration fees to pass-through the cost of the insurance, or offer an opt-out for athletes who don't want to pay the extra fee. Either scenario, although higher revenue projections are associated with the former, are promoted to increase registration numbers overall, thus increasing revenue. Overall from the event standpoint, they are merely an intermediary who emerges with more revenue and looks almost charitable to registrants.

From the Denver Triathlon website as a registration add-on

From 365Competitors point-of-view: To make sense for 365Competitors, like any other insurance company, they will have calculated and estimated the dollar amount of reimbursements returned to athletes is (significantly) less than the fees they make from their percentage of race revenue. That is to be profitable, but the tag line is "It's good for the sport," so it appears there is at least somewhat of an altruistic element as well. Not to say they won't make money, other insurance companies seem to be just fine.

Is this a merely a trend or will it become the norm for races in the future? As 365Competitor gains more partnerships and if they are able to deliver on the ROI for events, more races will certainly entertain the idea. It will be interesting to see how this does affect registration AND participation, and where the registration fee threshold lies for 365Competitors to become involved - how many $895 Ironman NYC registrations can they afford to refund? Although the cost to the athlete to insure that registration would certainly be proportional, somewhere around $50-60, and consequently the opt-in rate for a registration this expensive could be very high. No doubt this will be something to keep an eye on in the future.

For more, visit 365competitors online.