APRIL 1997 BACK ISSUE
Part of Horse Previews Magazine website. Posted on 4/1/97; 10:00:00 AM.
Maybe He Should Have Been Wearing Boxers Instead of Jockey's?
by Roger HoustonThe Famous Thoroughbred Racehorse Cigar,
Has Yet To Hear The Sound Of Little Hooves...Cigar, two-time Horse of the Year from 1995 and 1996, has been trying to become a father since he ended his racing career. During his illustrious career, he won 16 straight races with career winnings of $8,069,815. He was bought by Coolmore Stud of Ireland so that any mare owner who would pay his $75,000 stud fee could be the owner of an offspring from the great Cigar. His stud fee was the highest of all new stallions in 1997.
He was sent to Coolmore's Ashford Stud division in Versaillas, Kentucky to breed. There, he was booked to more than 80 mares, including 1983 Horse of the Year All Alone as well as divisional champions Eliza, Estrapade, and Yanks Music. By March 10, he had covered 36 mares. 20 of those have been checked through ultrasound and none have taken.
Coolmore was betting on the idea that Cigar would perform as a stud just as he had as a racehorse.They bought a three-fourth share in the horse's fertility which raised his value to $25 million. This left the original owner, Allen Paulson of California, with a one-fourth share in Cigar.
This bet was not one that the owners could take to the bank because as a stud, Cigar is basically a dud. The owners had this obstacle covered because they had taken out an insurance policy that covered congenial infertility, as well as mortality and infertility caused by sickness or accidents.
For the holder of a congenial infertility insurance policy to claim on it, the stallion must be considered a failure based upon performance as a stud. Under Cigar's policy, he is considered a failure if he fails to impregnate 60% of the mares that he covers during his first season of stud duty. The policy states that a minimum of 20 mares must be covered. However, the insurer can exclude any mares that are over a specific age or have had problems conceiving in the past. Any mare that is bred in her foal heat is also excluded from the `20.'
Cigar's insurance policy was issued by Assicurazioni Generali S.p.A, an Italian-based insurance company that has 273 branches on six continents and in countries ranging from Lebanon to Peru. The policy was purchased through the Generali Group's United Kingdom branch, which is based in London.
The Daily Racing Forum reported that the congenial infertility policy was purchased for 3% of Cigar's insured value, or $750,000. The accident, sickness, disease, and mortality policies as well as the congenial infertility policy cost a total of $2.25 million, according to Richard Trontz of the Bluegrass Bloodstock Agency of Kentucky.
All that a stallion owner must do to take out a policy on a horse's fertility is submit a veterinarian checkup and proof of value. In order to keep it fair to both the insurer and insuree no test breedings or tests for sperm counts are allowed. This is done because if the horse was fertile the owner would not take out a policy and if the horse was infertile, the company would not issue the policy.
The company that issued the policy, the Generali Group has a reported $71,864,839,000 in assets for the 1995 fiscal year. This was 23% above the 1994 total of $58,367,193,000. The amount that must be paid out on Cigar's policy is only about .035% of the total of Generali's assets. This is equivalent to about 7 miles of the Earth's total circumference.
In the last year, Generali has brought in a total of $21.5 billion in premiums. In contrast, Cigar's policy was taken out for a mere $2.25 million in premiums.The Generali Group consists of a total of 157 companies, of which 97 are insurance companies, 36 are holding and financial companies, 22 are real estate companies, and two are agricultural companies.
As for Cigar, he will become the property of the insurance company, Generali, because when a horse is claimed under this policy its ownership is transferred to the company who issues it. However, Paulson has expressed an interest in purchasing Cigar from them for sentimental reasons. Cigar will probably finish out his life at Paulson's ranch in Kentucky.
