Steamboat Pilot & Today

Steamboat Springs — Vail, Telluride and Crested Butte ski areas have cashed in on a Steamboat-based insurance company's new policy that protects ski areas from bad years.

Steamboat isn't joining them, just yet.

About four years ago, Joe McNasby, president of MDM and Associates Inc., came up with the idea of creating a ski area insurance policy that will cover "anything and everything that causes people not to come to your facility."

The policies pay off once skier visits, minus complimentary tickets and season passes, dip below a projected level based on past seasons for any reason. Some have called it "snow insurance" although the protections are for more than weather woes.

Although McNasby wouldn't say how much the premiums are, all indications are that the insurance is expensive.

"We don't have the insurance, and frankly we haven't seriously considered it," ski corp. President Chris Diamond said. "It's a new product, and we didn't take part last season because we weren't really aware of the advantages it might have brought us. In retrospect, though, it wouldn't have done us much good. We only would have lost money."

That's because Steamboat had a decent season. If it had the insurance, the company would have spent a sizable amount of money on the premiums, and because no major losses were demonstrated by the end of the season, would not have received a claim check from MDM and Associates.

However, ski corp. officials may have considered the insurance policy more seriously had they not been so confident in their new marketing strategies.

"We had a tough season the year before, and we were pretty confident, given the relative reliability of snowfall in Colorado and the new programs we'd had in place like a major new initiative on the Front Range," Diamond said. "We didn't think there would be much of a downside, and we were right."

Aspen Ski Co., like Steamboat, opted not to buy the insurance policy because, as Diamond said, it didn't seem "financially meaningful."

McNasby insists that the product is going to pay off, and that demand is going up each year.

"Vail collected $10.6 million in claims this year, and by the end of all the ski seasons nationwide, we will have written claim checks for well over $25 million," he said. "Everyone's aware that the ski business hasn't been growing. It's been somewhat flat, and everyone's trying to get a piece of the pie. If there was 10 percent growth every year, I'm sure there would be less of a need for something like this. But this hasn't been the case."

Telluride and Crested Butte filed claims and officials at both resorts said they felt the insurance was a good investment for the low-snow winter of 1999-2000 when the industry suffered its worst season on record.

Diamond, who admitted he is ready to consider insurance more seriously, still expressed his confidence in the reliability of snowfall in the Steamboat area.

But other ski resort bosses aren't as comfortable with counting on Mother Nature. That's why Vail, Telluride, Crested Butte and even ski resorts in France, Canada and Australia have all become snow insurance policy holders.

McNasby insists that the insurance policy, which would cover losses caused by airline strikes, road construction and a multitude of other problems, is about more than weather insurance.

But that is one of the protections and with predictions for increasingly warm weather in coming years, guarding against low snowfall is enticing even in Steamboat although for now the ski area uses snow guns, not insurance.

"There is no question that there have been warmer temperatures recorded over the past years, on a global scale," American Skiing Co.'s Skip King said. "We're concerned about it, yes. But there's little we feel we can do about it. I guess snow-making systems that can take advantage of the right weather windows are key."

But by next season, Steamboat may have signed on with MDM, after officials examine the insurance policy a little closer.

"We'll look at it again for next season," said Dennis Baker, vice president of finance at ski corp. "We haven't made an application or anything like that at this point. It's all so very new. We plan to discuss it and see if other resorts have had good experience with it. It is an intriguing idea."

To reach Bonnie Nadzam call 871-4205 or e-mail bnadzam@amigo.net