Lloyd’s successfully predicted the winner of the World Cup for a second tournament in a row by using insurable value.
Lloyd’s correctly predicted France would win the 2018 FIFA World Cup final before a ball was even kicked.
The prediction was based on an economic model assessing the insurable value of all the squads competing in the tournament, which was released last month with the Centre for Economics and Business Research (Cebr).
It is the same model that allowed Lloyd’s to correctly predict Germany would be crowned World Champions in 2014.
- Before the tournament, Lloyd’s analysis identified France as having the squad with the highest insurable value (£1.43bn) because of its relatively young squad together with the plethora of world class players across Europe’s top leagues.
- Many organisations have been making predictions based on various economic models, but insurable value has proved the most reliable predictive tool, despite many upsets during the competition.
- The insurable value metric has been reliable throughout the tournament, correctly predicting the winners in almost two thirds (64%) of the 64 matches played.
Cebr used players’ wages and endorsement incomes, alongside a collection of additional indicators, to construct an economic model which estimates players’ incomes until retirement. These projections formed the basis for assessing insurable values by player age, playing position and nationality.
The analysis enabled Lloyd’s to predict who would qualify from their respective groups and progress through knockout stages. The team with the highest insurable value in each match is the team Lloyd’s predicted would win and progress.
The research was supported by Sporting Intelligence, who provided anonymised footballer salary data for each of the 32 teams participating in the 2018 FIFA World Cup, based upon an indicative 30-man squad for each nation.
Victoria de’Ath, Lloyd’s Class of Business, said:
“It was a great tournament this year, with a number of shocks along the way which have put many economic models to the test.
“Having correctly predicted Germany to win four years ago, we always knew the pressure would be on to get it right again. France’s success in the Final on Sunday proves that Lloyd’s insurable economic value model is one of the most reliable predictive tools out there.”