A Fortune 500 client was looking to insure an "instant win" $1 million prize. At first glance, an "instant win" is usually considered a "guaranteed win" and is therefore considered non-insurable.

A prize indemnification policy for this risk was an option. Even though the winner did not have to perform any special tasks to claim the $1 million prize, there was a substantial possibility that the winning coupon would never be encountered, thus ensuring that the win was not "guaranteed." Regardless, this proved to be a challenging risk to place for the following reasons:

• The promotion was scheduled to begin in 2-3 weeks.
• Details still needed to be gathered, as well as advertising and distribution approved and signed-off by the underwriters.
• The pricing of the risk was very high since the contest was an instant win, the prize was $1 million, and the client had a multi-million dollar advertising budget that would be used to promote the instant win opportunity.

Marsh's challenge was to come up with an insurance premium that would provide a benefit to the client to transfer the risk, rather than self-insure the $1 million prize. A price was negotiated that met with the client's financial goals. This premium was attained by:

• Stressing the "slippage" factors - what percentage of product would most likely not be sold or the coupon thrown out with the packaging.
• Arranging for a security seeding survey of the actual printing and placement of the winning coupon, which was performed by a representative of the insurance company. Arrangements for this survey were made within 24 hours.

As a result of Marsh's around-the-clock availability and expeditious program delivery, the client purchased the coverage. 

The prize eventually was won. The rules of the promotion stated that the winner would receive a $1 million annuity within 30 days of proof and acceptance of the claim. Marsh arranged the purchase and administration of the annuity with a major financial institution.

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