Some businesses that were affected by the unrest and looting in July, largely in KwaZulu-Natal and Gauteng, have already received a total of R5.8 billion worth of insurance payouts from the South African Special Risks Insurance Association (Sasria), the entity said in a joint statement with National Treasury on Monday.
Sasria – which is still processing claims related to the incident – said it will a receive a R3.9 billion cash injection from the National Treasury, which has come on board as Sasria’s insurer of last resort.
The lifeline from Treasury will enable Sasria to honour its commitments to claimants affected by the unrest which shocked the country just over two months ago.
“Sasria has made important business interventions, namely capital and reinsurance restructure, and government, as the sole shareholder, has committed to stand in as the entity’s insurer of last resort,” the statement said.
Sasria insures businesses and people against strikes, riots and public disorder risks, protecting them against loss or damage incurred as a result of such events.
Insurer needs more support from government
Although the insurer says it remains in a positive financial position and is committed to paying claimants, it will need assistance from government in the future.
“Our discussions with National Treasury are in line with the desired determination of the best medium that can inject capital, as we look at how to be future-proof ready and acknowledge the lessons learnt during the unfortunate unrest in July,” Sasria MD Cedric Masondo said in the statement.
“The final additional support is dependent on how swiftly Sasria can finalise the total claim amounts. It is expected that the additional support which has been flagged in the recent special appropriation will be concretised in the 2022 Budget,” the statement added.
The insurer said it is working on fast-tracking payments below R1 million and aims to settle 80% of claims between R1 million and R30 million by the end of October.
Claims above R30 million will be paid to beneficiaries in instalments, with at least 30% of the total claim in each instance set to be paid out in the next few weeks.
Meanwhile, Sasria said it will collaborate with industry partners to ensure that damaged properties are rebuilt.
“Sasria has engaged with industry partners and reached an agreement that the damaged properties will rather be rebuilt, than do cash in lieu payments,” the statement said.
The July unrest saw some big shopping centres and warehouses being targeted in the two provinces by mass looting and destruction.
JSE-listed real estate investment trust (Reit) SA Corporate Real Estate was one of the worst affected by the unrest.
The Reit reported in a Sens statement in September that it is rebuilding its Springfield Value Centre in Durban, estimating that the centre will only resume full operations by October next year.
“Sasria continues to play a key role in the insurance industry. We urge clients to continue and maintain their policies with Sasria and would like to assure them of our determined resilience to maintain our excellent relations,” Masondo said.