What's the probability of Korea advancing to the last 16 at the upcoming World Cup in Brazil? According to the insurance industry on Monday, the odds currently stand at 55 percent, higher than the 48 percent just prior to the same event in South Africa four years ago.
Korea's chances of making it to the quarterfinals and semifinals were forecast at 18 percent and 13 percent, respectively, also higher than the odds of 16 percent and 6 percent granted the team in 2010.
Ahead of large sports events, insurance firms often forecast the likely performances of participating teams and individuals. This is because many businesses take out extra insurance policies to cover their additional marketing costs during the events. To capitalize on the opportunities of the World Cup, for example, some offer to provide 500 people with gift certificates each worth W500,000 if Korea advances to the quarterfinals (US$1=W1,023).
Insurance companies base their premium rates on probabilities and statistics, with reinsurers usually calculating the probabilities.
Korean Re, a reinsurance company, attributed Korea's improved chances in Brazil this month to the fact that the team has more favorable conditions now than it did four years ago. Statistics have shown that Russia, Belgium and Algeria, the teams Korea will face in the initial group stage, are weaker than its group rivals Greece, Nigeria and Argentina in South Africa.