Santam has now paid out R506m in business interruption claims

After originally dragging its feet on Covid-19 pandemic-related pay outs.
Image: Moneyweb

More than 1 315 businesses across South Africa, largely in the embattled tourism and hospitality industry, have now received desperately awaited Covid-19 business interruption insurance payouts totalling over half a billion rand from JSE-listed Santam.

The group confirmed the payouts in a statement issued on Thursday.

The largest short-term insurer in the country, together with several other insurers, initially dragged its feet in paying out claims to thousands of affected businesses that had policies with contagious diseases cover extensions.

Read:
Business interrupted, but insurers don’t want to pay
Santam clarifies Covid-19 position on business interruption cover

“Santam has to date paid out R506 million of the R1 billion allocated for urgent relief to policyholders in the hospitality, leisure and non-essential retail services industries who have contingent business interruption (CBI) extension in their policy cover,” the group said in its statement.

“The company commenced relief payments on August 5, and had by this morning [Thursday, August 13] already paid out R506 million in relief to 1 315 policyholders. The relief payments are a meaningful contribution to some of the most vulnerable small- and medium-sized policyholders who have been worst impacted by the lockdown,” it added.

Santam Group CEO Lizé Lambrechts said the company ensured that all the necessary resources were mobilised to effect the quick payment of the relief to policyholders.

“The average time from receipt of the required documentation to payment is less than five days. Relief payments are set at a minimum of R25 000 and a maximum of R1.5 million for individual CBI policyholders. Santam has made it clear that it would not make the process of claiming the relief too onerous for their qualifying clients and would rather focus on swift payment of the relief to the most impacted industries,” she said.

Santam Group CEO Lizé Lambrechts. Image: Supplied

“These payments are to existing policyholders who have claimed for losses during the Covid-19 pandemic period and have CBI extensions in their policies.”

The relief payments equate to 70% of two months’ value of the sum insured for Santam’s policyholders in the hospitality, leisure and non-essential retail services industries.

“The two months are reflective of the period from late March until about May, when most businesses were restricted from trading due to the Level 4 and 5 lockdown alerts in the country. The 70% is based on a view that the businesses would have experienced variable expense savings during the lockdown,” Santam noted.

The group, together with other short-term insurers – such as Guardrisk Insurance, Hollard, Bryte Insurance and Old Mutual Insure – are still awaiting legal certainty on the matter of business interruption claims linked to the Covid-19 pandemic. These groups have argued that the lockdown by government should not be used as the reason behind such claims.

Read: Insurers make concessions in business interruption cover battle

“The relief payments are the outcome of Santam’s proposal to the regulators [Financial Sector Conduct Authority and the Prudential Authority] to help existing policyholders who have claimed for losses during the Covid-19 period, while awaiting the outcome of the legal process to determine the interpretation of CBI cover on their policies,” Santam pointed out.

Meanwhile, Lambrechts said it was evident that the relief payments were making a tangible impact on the lives and livelihoods of policyholders.

“Judging from the feedback we have received, we believe that our relief payment approach is one of the most transparent and fair in the industry….We believe that we are making a big difference in people’s lives,” she said.

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Claim the money back from Government, deduct it from the tax.
Employees should do the same, as the ANC Government forced the closure.

I run large factories, assets exceeding R100m, remind me why santam will be our last choice
It is called trust and integrity..your word are not you bond

No need to brag about it, no kudos earned – this is why businesses pay for insurance.

Agreed, but then this should be applied equally including the story of Outsurance paying their business interruption claim.

End of comments.

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