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“The Kentucky Derby, whatever it is – a race, an emotion, a turbulence, an explosion – it is one of the most beautiful and violent and satisfying things I have ever experienced.”–John Steinbeck


Each year, on the first Saturday in May, more than 150,000 people will converge on Churchill Downs Race Track in Louisville, Kentucky. They will cheer on, bet on and watch some 20 or so three-year old thoroughbreds race their hearts out in the first race of the famed Triple Crown of horse racing.


It is expected that an additional 15 -20 million people will watch the Kentucky Derby on television and more than $140 million will be bet on the race. At stake in the Kentucky Derby is a $2 million purse, a trophy made of $90,000 worth of gold, and a shot at the Triple Crown.

The Kentucky Derby, first of the three horse races comprising the Triple Crown, will be followed two weeks later by the Preakness Stakes. Three weeks after the Preakness is the final race of the Triple Crown, the Belmont Stakes. Considered one of the most elusive feats in horse racing, and perhaps in all of sports, there have been only 12 Triple Crown winners. In 2015, American Pharoah became the first Triple Crown winner since 1978 when  Affirmed won.

The thoroughbreds racing in the Derby started competing in a series of races called the “Prep Season”, which included foundation-building races over a minimum of one mile between September and mid-February. After completing the “Prep Season”, the horses compete in 16 events comprising the “Kentucky Derby Championship Series,” which occurs over the 10 weeks prior to the Derby. A tiered point system is used to determine which horses will qualify for the Kentucky Derby.

The stakes for the winner of the Kentucky Derby are tremendous. Beyond the $2 million purse, Dan Metzger, president of the Thoroughbred Owners and Breeders Association, says, “The horse gains instant name recognition...You can expect horses with decent value to double, triple or quadruple in value – stud value – after winning the Derby. If a horse enters the Derby valued at $1 million to $2 million, a win could boost its value as high as $10 million.”

Protecting a Race Horse

Horses are a significant investment and a big source of income for breeders and owners. As such, breeders and owners rely on today’s equine insurance market to protect that investment and income.

For US thoroughbred breeders, equine insurance is available both domestically in the US and from the “London market.” The Lloyd’s of London “market” is actually made up of various underwriting “entities” or “syndicates”, including XL Catlin. Each syndicate at Lloyd’s has a maximum capacity per individual horse depending on their financial backing and appetite for risk. Underwriters can choose to work together on a particularly high valued horse and co-insure with one or more other Lloyd’s syndicates. Or they can decide to provide 100% percent of a horse’s insurance coverage, taking on the risk alone.

Today’s Equine insurance  market offers a broad range of flexible coverages designed with the needs of horse owners in mind. An all-risk mortality policy (ARM) is the primary equine coverage. It is similar to a life insurance policy and covers the owner of the horse for the value of the horse should it die or need to be euthanized because of injury or illness.. 

All mortality insurance policies are based on “current market value”. Like many investments, owners have to keep pace with any value fluctuations to assure the right protection. Horse values are determined by a complex set of factors that fluctuate with the horse’s age, abilities, breeding and competition history. If a horse is recently purchased, it’s easy to establish the “current market value” at the price paid.

In addition to mortality coverage, other equine insurance coverages include:

  • Theft: to cover value of horse if stolen.
  • Named Perils coverage reimburses a breeder for an Agreed Value if your horse dies from causes that are specifically listed in the policy, such as lighting, fire, windstorms, floods, explosions, etc.
  • Stallion Permanent Disability coverage provides financial protection against the stallion becoming totally and permanently impotent, infertile or incapable of covering mares as a result of an accident, injury, illness or disease sustained or contracted during the policy period.
  • Stallion First Season Infertility: reimburses a breeder the Agreed Value when a stallion in his first breeding season is unable to achieve a satisfactory conception rate from his booked mares.
  • Stallion Availability: insures against an intended stallion becoming unavailable to service the mare due to accident, sickness, disease or death.
  • Stallion Loss of Income: provides coverage against a loss of income resulting from their stallion being unable to fulfil its stud duties in a particular breeding season.
  • Prospective Foal: insures a breeder against a mare that is greater than 42 days in foal aborting, slipping, carrying twins or delivering a still born foal. Prospective Foal insurance also provides coverage against death of a live born foal during the insurance policy period.


Insuring a race horse or thoroughbred is tricky. Horses are part investment, part business partner, part family member. On race day, however, it all comes down to the thrill of the race. Owners, fans and the horses themselves love the joy, the competitiveness and the challenges associated with racing.

Laura Hillenbrand, author of a biography of one of the greatest horses in American history – Seabiscuit: An American Legend - put into words the excitement of a horse race:

“In November 1938, midway through what is still regarded as the greatest horse race in history, Seabiscuit and War Admiral turn out of the backstretch and drive for the wire. For thirty yards, the two horses hurried down the homestretch side by side, their cutting, irregular strides settling into long, open lunges, their speed building and building. A pulse of astonishment swept over the crowd. War Admiral, straining with all he had, was losing ground. Seabiscuit’s nose forged past, then his throat, then his neck. After a sixteenth of a mile, Seabiscuit was half a length ahead and screaming along. He kept pouring it on, flicking his ears forward….”

Twenty thoroughbreds will have their day at the track this year. As they have been saying in Louisville, Kentucky for nearly 140 years, Happy Derby Day! May the best horse win. Maybe this will be the year of another Triple Crown winner.


About the author... Charles Beach  is an underwriter with XL Catlin’s global equine business.  Based in Lexington, Kentucky, Charlie grew up in Kentucky around thoroughbreds and the horseracing industry.  His knowledge and love of horses led him to London for 10 years where he worked at Lloyd’s on both the claims and underwriting side of the business. 

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Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
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