Sasria expects to fork out R32bn to settle July unrest claims

The highest amount paid out to a single client so far is R1.5bn, but most claims are for under R1m.
Debris covers the floor between empty shelves inside a supermarket in Soweto following rioting. Image: Bloomberg

The South African Special Risk Insurance Association (Sasria) expects to pay out R32 billion to all claimants affected by the unrest that took place in KwaZulu-Natal and parts of Gauteng in July. The riots insurer together with its agent companies has already paid out R12.5 billion worth of claims.

The majority – 12 050 of 14 051 claims received – are for amounts below R1 million.

Retailers and mall owners generally received the highest single payment per client because of the extent of the damage to stock and property. Sasria said the most it has paid out per single client is R1.5 billion.

Read:

“In terms of all claims received, the most in number and rand value came in the following order: fire commercial, heavy commercial vehicles, light commercial vehicles, and business interruption,” Sasria said in a statement.

Welcoming National Treasury’s announcement in the Medium-Term Budget Policy Statement last week that it would inject R11 billion into the state insurer, Sasria said the funds will go a long way in assisting with its liquidity and recapitalisation project.

Payout timeline

Sasria says it plans to settle claims up to R20 million by the end of the year and 80% of claims of up to R60 million by the end of March next year, while the settlement of bigger claims will take longer.

Read:

“The realistic overall settlement of the R32 billion would include the reinstatement of buildings and that we are saying will take up to 18 months,” Sasria’s executive manager in insurance operations, Fareedah Benjamin, said.

“But where we do have valid information to do interim payments … those are done as and when the information comes through.”

Listen: Muzi Dladla of Sasria discusses the progress made in paying out unrest claims, on the SAfm Market Update with Moneyweb

Unrest cost to clients

According to Sasria, the unrest will not have a substantial impact on its clients’ premiums; it says that outside of its traditional annual increases, clients need not worry about the entity having a “knee-jerk reaction” as a result of the unrest.

The insurer did warn however that a dramatic increase in reinsurance costs could still have an impact on client premiums, saying that its reinsurers are still unsettled by South Africa’s political environment post-unrest.

“We are hoping it [reinsurance costs] will not be as bad as what we’ve seen in the last couple of months and the increase [will] be minimal, because a massive increase … will always be a problem for the underlying premium for our clients,” said Sasria MD Cedric Masondo.

Outlook

The riots insurer says it has seen a significant uptick in Sasria insurance uptake among business owners since the destructive events of July and has noticed a rise in interest in how the insurer operates.

The insurer says it is now looking to attract more clients in the small-, medium and micro enterprises (SMME) space, expressing an interest in expanding its services to township businesses.

AUTHOR PROFILE

COMMENTS   2

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

World’s largest riot claim I heard somewhere. Well done ANC SA!

A billion here, a billion there, soon you’re talking real money.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: