Actuaries Score with Sporting Injuries Study

In the recently-completed NBA season, the Oklahoma City Thunder were favoured to make it to the finals for the second straight season, and potentially win the championship. But when point guard Russell Westbrook injured his knee in the first round, their fortunes were changed significantly. They were subsequently knocked out in the conference semi-finals, managing just one win against Memphis.

Player injuries represent a significant risk in the sports world. They are normally impossible to predict and have real financial consequences—not just for fans who may have some money riding on their favourite team. Each year, professional sports clubs pay millions of dollars to injured players with guaranteed contracts, and have virtually nothing to show for it.

This combination of uncertain events and financial consequences sounds like an ideal application for actuarial skills, so it should not be surprising that some fellow actuaries have done just that. According to a recent article on the UK-based Actuarial Post website, actuaries at Towers Watson have performed a study on the injury experience of English football’s Premier League. By their estimates, clubs are on course to pay over £100 million (C$160 million) in salaries to players unavailable for at least 30 days due to injury in the 2013–2014 season.

This information is useful to insurers that provide coverage to clubs, but does not in itself provide much relief to the affected teams. That is why, according to Paul Moorshead, a senior consultant with Towers Watson, it would be more useful to identify which players, or groups of players, are more susceptible to injury. Among their findings was the fact that players aged 29–31 who spend 60 per cent or more of their matches on the bench carry a very high injury risk.

You can read about the Towers Watson study on the Actuarial Post website.