A1398
Title: Injury risk management in the National Basketball Association: An actuarial approach
Authors: Hashan Savinda Peiris Kalugama Gardige - Simon Fraser University (Canada) [presenting]
Jackson Lautier - Bentley University (United States)
Himchan Jeong - Simon Fraser University (Canada)
Abstract: Major professional sports leagues have become large-scale financial institutions, increasing the financial risk associated with athlete injuries and the need for injury risk management. Injuries in the national basketball association are analyzed from the perspective of insurable risks using a three-part actuarial compound model for injury frequency and a two-part severity structure capturing missed games per injury and financial loss per missed game. The model is fit on a novel dataset from the 2022-23 NBA regular season combining injury reports, tracking and box score metrics, salary and demographic information, travel, television market variables, attendance, and estimated single-game values. Higher expected losses are predicted for players with higher salaries, average minutes played above 32 per game, and larger markets. The top ten players account for about \$453m in at-risk injury losses per season, exceeding 25\% of total estimated at-risk losses. Risk mitigation implications follow from the actuarial structure. A uniform 10\% reduction in average minutes is estimated to reduce expected compound loss for the highest-risk players by 30--35\% (about \$9--25m per player). Leaguewide, shortening NBA games from 48 to 40 minutes is estimated to reduce total expected claims by about \$493m.
