Can Sasria honour claims of up to R30bn?

It has less than R7bn available.
Community members start cleaning up after the devastation at Bridge City Mall in Durban on Thursday. Image: Elmond Jiyane, GCIS

You can sail a 22-foot yacht across the Atlantic by yourself if things go right, but you will struggle to survive if they don’t.

The man holding the helm at the South African Special Risk Insurance Association (Sasria), managing director Cedric Masondo, has just sailed into a huge storm in a boat that is probably too small to reach land without serious damage.

Sasria’s latest annual report creates the impression that the recent unrest, looting and vandalism will create the biggest challenge the association has ever encountered since its establishment in the late 1970s.

The last few years were relatively easy. Sasria paid claims for damage resulting from the odd service delivery protest or wage strike, and – if the annual report is anything to go by – spent the rest of its time on less pressing social issues.

Sasria collected just more than R2.4 billion in premiums during the year to March 2020, a satisfactory increase of 11% compared with the previous year. It paid out fewer claims than in the previous year, with claims decreasing to R992 million compared with nearly R1.6 billion in the 2019 financial year.

This enabled Sasria to spend R113 million on salaries and another nearly R10 million on staff training. It also transferred R43 million to the community by way of socio-economic development.

There was also no pressure on the investment advisors to work too hard: they stuck 71% of the investment portfolio in low-risk cash and near-cash assets, which yielded a low return.

R992m vs R20bn

The R992 million in claims paid out in the 2020 financial year – the 2021 annual report is due soon – is a drop in the ocean compared with the potential claims Sasria is facing now.

The damage by the widespread looting and destruction in KwaZulu-Natal and parts of Gauteng is estimated to be as high as R20 billion or even R30 billion.

The SA Property Owners Association (Sapoa), which represents over 800 organisations in the commercial property sector, with 90% of the nation’s commercial real estate owned by its members, estimates the damage at more than R20 billion.

It says it has collated figures showing that some 800 stores have been looted and/or severely damaged while 100 malls have been either burned down or have suffered significant fire damage. A number of distribution centres in Durban have also been looted, with serious structural damage.

Sapoa president Andrew Konig quoted from estimated figures supplied by the eThekwini Economic Development and Planning Committee, stating that:

  • Some R1.5 billion has been lost in stock;
  • Property damage exceeds R15 billion;
  • Over 50 000 informal traders have lost their livelihoods; and
  • Approximately 1.5 million people have lost their potential to earn an income.

There are also some 150 000 jobs at risk.

Konig says the overall result of the past five days of devastation is an estimated loss to GDP upwards of R20 billion.

Sapoa estimates that the repair and reopening of a mall that has been burned down is likely to take at least two years, while those that have suffered less structural damage may still take a couple of months to reopen.

Sasria has publicly estimated the damage at anything from R3 billion to R10 billion. An earlier report quoted Masondo as saying that damage could amount to between R3.5 billion and R7 billion, while he said in a later interview with Reuters that damage could be as high as R10 billion.

Read: Insurance claims from unrest seen at up to R10bn – govt insurer

Coincidently, he also mentioned that Sasria will be able to settle claims of up to R10 billion with its “own balance sheet”.

Masondo later said that damages could be as high as R12 billion.

While it is impossible to tell how much of the damage is covered by insurance and how many policies include Sasria cover, the figures suggest that Sasria might be swamped.

Sasria describes itself as the primary short-term insurer in SA, providing cover against special risks such as civil commotion, public disorder, strikes, riots and terrorism.

It notes in its marketing material that cover is needed as seen by recent increases in service delivery protests, student protests and labour strikes, as well as the increase in international terror incidents.

However, it is unlikely to have expected damages on the scale seen over the last few days.

The annual report states that Sasria has assets under management of R8.5 billion as at the end of March 2020, and disclosed an equity value of R6.9 billion.

Claims of R10 billion would be likely to bankrupt Sasria if it was a traditional private sector insurer.


The financial statements create the impression that Sasria has inadequate reinsurance cover.

In 2020, it recovered only R592 000 from R992 million paid in claims from reinsurance.

Masondo said in his report to stakeholders that Sasria’s approach is to determine what size of catastrophe it will be able to withstand.

“The worst-case scenarios or catastrophes have been calculated as part of Sasria’s own risk and solvency assessment and therefore our target is set at 230%.

“We are committed to standing behind all South Africans in protecting them from harm in terms of the perils which we are mandated to cover.”

Sasria MD Cedric Masondo. Image: Sasria


Masondo was not available to confirm the limit of R500 million applicable to a single claim, but it seems high enough to cover the majority of claims in full if one considers that every shopkeeper in a mall will be able to submit a claim. However, some big malls might be exposed.

Lisa Swaine and Maria Philippides, partners at law firm Webber Wentzel, warn that businesses seeking to recover losses need to act quickly in filing claims to Sasria.

“If Sasria cover is in place, depending on the extent of the cover obtained, your business might be insured against the risk of loss or damage to its tangible assets, goods in transit, money, vehicles, construction works and construction plant and equipment, as well as specific consequential business interruption loss,” say the lawyers.

They list a few important things that affected business owners need to consider:

  • Time is of the essence. Your insurance broker must be notified of your claim, if not immediately, as soon as possible, so they can notify your insurers. Sasria must be notified within 30 days of the broker receiving the claim from the insured party.
  • Start gathering the evidence. The fact that the entire country has been affected by these acts of vandalism, riots, public disorder and civil commotion does not mean that you can take your claim and loss as a given. You need to prove your claim and that it falls within the cover provided by your Sasria policy. Photographic and video footage evidence of the incidents, if available, must be obtained and preserved.

Santam said that by close of business on Wednesday (July 14), it had received 21 vehicle-related claims and 167 other claims for damage due to the looting and unrest.

“At this stage we are unable to provide a monetary amount for these claims as the loss adjusters must still determine the extent of the loss for each claim,” it said in a statement released late on Thursday afternoon, urging policyholders with Sasria cover to register claims with their intermediaries or directly with Santam as soon as possible.

Sanlam indicated that it is engaging with Sasria to ensure that claims are handled as quickly as possible.

Listen to Fifi Peters’s interview with Sapoa CEO Neil Gopal (or read the transcript here):



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How much of the total damage goes for account of the frog boiler and his ministerial circus of incompetents that were sitting on their hands for days and allowed the chaos merchants to operate freely ?

Cometh the hour, disappeareth the man.

Watch the same “hand sitting” which will now take place due to sky rocketing unemployment which is already at laughable levels.

Two years ?

More like 5! If SASRIA is like any other Government Dept, i foresee court cases, headaches , denials/refusals and a commission of inquiry to just stall payouts

The Insurance Industry is a controlled racket, nothing more than a Ponzi scheme

This carnage is going not only going to leave people out of pocket, but will have a long term psychological effect , the extreme this country has never before experienced. The last thing we need is a bankrupt insurer!

Lets hope this Government steps in and ensures claims are expedited. Peoples lives depend on it

They engaged reverse, the turbo charger and prepped the girls on the call center a week ago.

Going to be the stalingrad of insurance.

My broker sent me a cheeky letter yesterday asking if I wanted SASRIA cover?????? told her no as it would cost me a fortune trying to claim.

Short term ins made mega profits last year but still stalling on business interruption payouts.

Sorry, meaning to reply to pwgg’s comment.
SASRIA’s premium are tiny, if you’re making more than a few thousand in profit a month, I would definitely consider accepting it, a bad riot like the KZN ones completely destroy your business and your insurance will not pay out for that, only SASRIA would.

You would probably have to wait a while for claims, but overall SASRIA will usually pay out and is government underwritten, so will eventually end up with a payout.

One may legitimately wonder why it was left to fester for as long as it did especially as they were forewarned.And then a wholly lukewarm response with the main course being served after the party was over.

and still CR are doing absolute nothing! I appreciate what you are doing Solly Amra, Rameez Amra and Ally. Thank you!!

For SASRIA, July will be like January for ordinary citizens – i.e. 90 days long!

Government bailout in the coming weeks and months?

I am totally amazed that SASRIA still has R10 billion left in the bank. I thought that by now the cadres would have plundered that a long time ago. How did they miss this one?

now they know. We underestimate these #$#$$^$@!

Why do I have a vague recollection that the SASRIA funds were expropriated somewhere in the past? Anybody with info?

some comment somewhere said the anc took 100mil

sorry, i mean 100bil

honey talks about 50bil

i dont know, just saw these figures in comments

Guess CR will have to sell a few buffalos to help out. If only the rioters had destroyed Etoll gantrys with the same amount of enthusiasm.

If this were Santam they would deny claims and argue that this is not political protest, it is merely hungry people shoplifting.

by the way, why would SASRIA not have reinsurance?

They will have reinsurance. I can’t imagine any issues here. I would be astounded if they are in for more than R250m at net.

It does, not clear how much or at what level it kicks in ; and public statements so far are vague or contradictory.

they have reinsurance. you can see it is discussed a bit in their financial reports. the level when reinsurers start to pay isn’t clear – and how much the reinsurers will pay up to isn’t clear either.

I think Santam would prefer claims to be covered by SASRIA under political violence than under theft cover. It would be more likely for SASRIA to dispute the political motive and blame it on theft.

we pay every month in our insurance for this for my 26 years here in s.a.

” It also transferred R43 million to the community by way of socio-economic development.”
WTF — are we contributing to a SASSA distributorship here ???

That was NEVER mentioned in the policies !!!

Who is the “insurer” of last resort? Who stands behind Sasria when the kitty runs empty? People who suffered damage will try to claim from the state. It is clear that the state is incapable to gather intelligence to prevent rioting and looting. Anyway, the cost of the damage is immediately transferred to the banking system that holds these properties as collateral for loans.

This implies that, in effect, the SARB guarantees the values of these properties, even if they are destroyed. If Sasria is overrun with claims and the banks cannot carry the losses either, the SARB is mandated to stabilize the banking system.

This implies that the purchasing power of the currency is the last line of defense against plunder and looting. If the plundering carries on for long enough, even this last line of defense will fall. Then, the looters will pay with the purchasing power of their social grants, for the damage they have caused.

What is the difference between expropriation without compensation of groceries and furniture in South Africa, and the nationalization of agricultural land in Zimbabwe? The effect on the banking system is exactly the same.

Most insurers have reinsurance for calamities and most of those reinsurers are global and spread underwriters so that no one party gets cooked by an event.

Even for normal property insurance, our local big names reinsure anything over I think R300m against total loss. Our insurers carry the small claims eg a partial fire. Total fire or flood loss risk of one premises is spread over several parties.

It is a good system as it protects me against insurer A being unable to meet its obligations to me and adds stability to a necessary industry.

I would have imagined governance requires SASRIA to reinsure massive loss events.

The full cost of this will be far far higher on the entire economy.

Things like shipping container are already 4times the pre-covid costs, that means for each day that the products are in storage the items both get closer to their use by dates and incur storage fees.

The Rand’s depreciation against the dollar being about 20cents.

Then we have trucks and shops:

A typical truck costs R2mil with a multiple of 10 for its goods making the value lost per truck in the region of R22mil, with probably around 200 trucks being written off that alone bing R4.4bil

Setting up of a KFC shop is about R5mil, most of the shops on malls are well oiled business and seeing that over 800 were looted and damaged that means R4bil was lost.

A minimum cost of R10bil in physical assets, reputational damage easily R500bil.

Simply put the anc has a created a monster because of their selfish ideology, whereby have 100% of nothing is more important than having 1% of something.

agree Purge. The consequence ( not the cost ) is incomprehensible by these cerebrum sagacity’s.

forgot to mention the psychological effect ( the non-physical ).

R500 Million seems more than enough per claim, the catch in the small print is this is per individual or holding company.

R500 Million will not be enough to cover some companies that have multiple malls/buildings.

I think larger businesses could opt-in for the R1bn cap, should cover most of their losses I would think.

“This enabled Sasria to spend R113 million on salaries and another nearly R10 million on staff training. It also transferred R43 million to the community by way of socio-economic development.” Salaries seem extremely high but how do they compare to other insurance companies – is this another failed SOE waiting to happen with excessive benefits for deployed cadres? An R 43 million on socio economic development? They are sacrificing their clients in favour of pursuing the racist ANC’s communist social goals?

That had me confused. I can’t understand the salary bill.

SASRIA used to be a massive portfolio built up in the apartheid years and the 90’s. If my memory serves me correct the underlying assets were in excess of R50billion in size. I can’t remember exactly when it happened, but I think in the early 2000’s the decision was taken that the portfolio was woefully overfunded for the risks inherent in the stability of a democratic South Africa and the overfunded surplus was transferred to the fiscus to reduce the fiscal deficit leaving the fund with underlying assets of around R10billin at that time.

They still owe Richards Bay Minerals over R300 million they lodged with them for the 2017 disturbances to their operations. If I were with them in business insurance I wouldn’t hold my breath.

Jip — A case study in point !!!

That force majeure seems like small change now.

would like to see a breakdown of sasria’s salary component of R113 million for the year and its staff composition

104 full time employees, total salaries 65m

incl 2 execs 7m and 5 senior mgt 12m

Bonuses 30m (!)
Pension contribs 15m (DC, 23% ?!)

Let’s say they can pay in full. The looters think – all is well that ends well. Well, I am predicting the following will happen. The shops that were looted will get their money, but more than 50% of them won’t be re-investing in KZN. They will probably take the following options:

1. Sit on their money
2. Leave KZN for WC or else where South Africa and invest there
3. Take their money and leave South Africa

In all these situations the only losers are the honest left behinds in KZN and the looters themselves! How stupid could they be!

“The financial statements create the impression that Sasria has inadequate reinsurance cover”

It’s ‘excess of loss’ cover so it only kicks in above a certain level of claims, there’s not enough information disclosed to assess it – the 230% you quote means nothing to a layman. 7.5% of premium ceded to reinsurers doesn’t seem a lot on the face of it, but we can’t tell – and the lack of comprehensible public disclosure on this point isn’t encouraging.

And it’s not just a matter of claims, its solvency reserves need to be rebuilt afterwards. It’s inevitable that Government will have to recapitalise Sasria, there will be a fiscal knock.

How in the world is it possible for SASRIA to only have 7bn in assets considering the fact that it is compulsory for every insurance policy to have it??

These fools have been spending money on crap instead of building the reserves required to protect clients from an event that any actuary with two braincells could have predicted

As someone else pointed out there was a big transfer in the 90s from Sasria to the state to reduce debt. It was all above-board and it seems to have been done in terms of an act of Parliament.

In Germany the heaviest rainfall in a century brings the country to a standstill in three days. In three days in SA we get the same result from political infighting.

Sir, your tagline “It has less than R7bn available.” is inappropriate when considering the claim paying ability. Your comment that “Claims of R10 billion would be likely to bankrupt Sasria if it was a traditional private sector insurer.” may also inappropriate. In both cases you are forgetting about the reinsurance that the company has. Please understand the nature and level of reinsurance cover they have as it will likely change your conclusions and require you to reword your article.

On reinsurance, from AFS:

“ The maximum any one insured can claim is R1.5 billion. Losses arising from an event (where more than one insured is affected by the same event) in excess of R500 million will trigger Sasria’s catastrophe reinsurance.”

I suppose a lot is going to hinge on what is an event. Would this be many events at many locations or one insurrection event?

Reinsurance premiums are I think about 20% of premiums collected and are spread over six or so very large reinsurers

Depending on certain technical elements and the size of the damage in the different places, it may be beneficial for SASRIA to claim that kzn and Gauteng were two separate events, allowing them to claim twice from their reinsurers. Their reinsurance contracts would need to allow for this (technical term: a reinstatement) but it would give them access to a far greater claim paying capacity. Sadly, the journo has got this one wrong. Dunning-Kruger perhaps?

According to the article:”There was also no pressure on the investment advisors to work too hard: they stuck 71% of the investment portfolio in low-risk cash and near-cash assets, which yielded a low return.”
The investment advisors got it spectacularly wrong. Wonder if they pocketed the usual 1-2% for what turned out to be very poor advice.

First, the hard lockdowns, then limited numbers hampering turnover, Pillaging and looting not only taking but also severely damaging and now the thought of insurance not being able to cope!
Those businesses who survive this will be extremely tough.
Yet, at the end of it all, the consumers will foot the bill for it all and, as a result, we have a strong possibility of rising inflation in a shrinking economy – stagflation.
Was this the plan from the start?

So it’s ultimately up to either ZurichRE or AllianzRE to decide whether South Africa’s fiscus suffers a terminal rupture or not.

I wonder what plans they have for us…

End of comments.




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