Thrill of the race

Horse race

Ahead of the Grand National we look back at Lloyd’s long history insuring equine risks

A British sporting institution, the Grand National is arguably the ultimate test of racehorse and rider. A National Hunt horse race – or steeplechase – it encompasses 30 fences over four and a half miles.

The majority of horse and jockeys fail to complete the two circuits. In 2012 only 38% of the 40 runners finished, down from 48% in 2011. Back in 2001 just 10%, or four out of 40 runners, completed the race.

While it remains a popular race, it is also controversial due to the risks involved. Two horses – including race favourite Synchronised – died at last year’s event.

Both horses were injured and later put down after they broke legs attempting to clear Becher’s Brook fence. The fence is notorious for causing the highest number of deaths and injuries in the iconic race.

Further modifications have been made to the Aintree course as a result of last year’s losses. The changes have focused on fence design, landing areas and riderless horses.

“Balancing the Grand National’s enduring appeal while working to reduce risk in the race is a delicate but important balance to strike,” said John Baker, who runs Aintree Racecourse as part of his role as North West regional director for Jockey Club Racecourses, in a recent statement. “In recent years we have made significant investments in safety and... we will continue to do so while preserving the unique character and appeal of the nation’s favourite race.”

Lloyd’s bloodstock history

For hundreds of years bloodstock has been an important specialist risk at Lloyd’s, insuring valuable horses against risks such as death, illness, theft and infertility. Racehorses are frequently underwritten in the market.

Georgina Smart, equine underwriter at Kiln, has a focus on equestrian horses although she also insures flat race horses. In flat racing typically insurance is against death and, where appropriate, permanent infertility. The value of the horse is often its future stud potential.

Premiums for flat racers are around a third of the premiums for a National Hunt jump racing horse, she explains, as the risks are not as high. Individual horses are priced based on their age and sex. “If the male horse is unlikely to go to stud it probably has a similar value to a gelding [a castrated horse],” she explains. “It might win for prestige or prize money, but if it is likely to go to stud it will have a higher value.”

Lloyd’s fortunes have been inextricably linked with its equine friends, even as far back as 1689 in the first recorded news of Edward Lloyd’s Coffee House. Here the London Gazette for February 18-21 1689 offered a reward to anyone who could help trace a thief who had stolen five watches from the coffee house as well as a horse.

More recently, Irish racehorse Shergar was allegedly kidnapped by the IRA thirty years ago, never to be seen again. The incident remains one of sport’s biggest whodunnits.

Shergar was five years old and preparing for his second season as a breeding stallion when he was snatched. The famous horse, with a distinctive blaze on his face and four white “socks”, had won the 1981 Derby by ten lengths.

The kidnap was a complex matter for Shergar’s insurers, according to Hazard Unlimited, a history of the Lloyd’s market. The horse had been owned by a syndicate, some of whose members had taken out cover for theft, while others had not. In the end, an ex-gratia payment was made to the tune of £7m.

Another famous horse, Secretariat, had been covered for $10m against failing a fertility test. The horse failed and the underwriters offered to pay if 60% of his first batch of mares failed to conceive. In the end, the stallion enjoyed a 98% success rate.

What a stud…

Fertility is a big issue in horse racing, with the owners of successful stallions hopeful their horse will enjoy a lucrative second career as a stud horse.

There are high hopes for super horse Frankel since he was put to stud on Valentine’s Day this year. Breeders around the world are vying for an opportunity to book encounters with “Usain Colt”, as he is nicknamed.

The famous stud horse’s diary for the next three years is already filled with a harem of elite mares, including Danedream from Germany, Japanese champion Vodka and Oatsee, considered one of the finest broodmares in the US.

“Taking it to the extreme, Frankel is expected to cover 135 mares this season and his stud fee is £125,000 per cover. So he’s going to earn around £16.875m,” says Smart. “But that is Frankel and there are plenty breeding for a £3,000 stud fee!”

Links have been made between the use of anabolic steroids in training and infertility but so far these have proved inconclusive.

“There doesn’t seem to be any pattern or reason to explain why horses are infertile particularly,” says Smart. “A claim that has come in recently has had every veterinary ‘i’ dotted and ‘t’ crossed and the horse is infertile, so it’s tricky. Others which have run on steroids and are older have not been infertile, so it seems there are still some questions over the exact impact steroids have.”

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