The South African Special Risk Insurance Association (SASRIA) has to date paid out R5.8 billion in claims to businesses that suffered damages during the July unrest in KwaZulu-Natal and Gauteng.
This was on Monday (4 October) revealed by the National Treasury and SASRIA in a joint statement. The two said that work had been underway to address the damages incurred and assist businesses to start operating again.
In the wake of the unprecedented chain of events that saw businesses looted and razed, government unveiled various interventions to support the affected establishments.
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. Government committed to enable SASRIA to meet all its policyholder commitments.
In the statement, SASRIA Managing Director, Cedric Masondo, said, “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.”
Additional R3.9b to SASRIA for insurance claims
The National Treasury has indicated that R3.9 billion will be disbursed to SASRIA following the conclusion of the recently tabled Special Appropriation Bill parliamentary processes. This was intended to assist SASRIA in meeting its obligations until the end of the current financial year, which ends on 31 March 2022.
The National Treasury said it was aware that additional government support would be required and was working closely with SASRIA to finalise the actual financial support need. It said the final additional support was 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,” reads the statement.
They reiterated that SASRIA had sufficient reserves, including through its reinsurers, to meet all valid claims. While the parliamentary processes for additional government support are being finalised, SASRIA remains liquid and continues to trade as usual.
SASRIA in the statement said almost 100 percent of claims notifications had been received and were in the process of loss adjustment. Since July, the two revealed that claims amounting to over R5.8 billion had been paid.
Quicker payments for claims below R1m
“All claims below R1 million to be settled and paid in full quicker, and the Agent companies are working extremely hard to make sure that these claims are paid as quickly as possible,” they said.
SASRIA and Treasury said the Association was determined to settle 80 percent of all claims between R1 million and R30 million by the end of October 2021.
SASRIA has started paying interim payments as proposed by Loss Adjusters on all big claims (above R30 million) and is determined to make sure that at least 30 percent of total claim value for big claims is paid in the next couple of weeks.
“We would like to assure clients that we have added resources to reduce any possible delays in the processing of claim payments. We are confident that in two weeks, we would have attended to all outstanding reports and made necessary payments,” SASRIA said.
It has engaged with industry partners and reached an agreement that the damaged properties will rather be rebuilt, than do cash in lieu payments. Collaborative work with loss adjusters and the industry would be done to ensure that the buildings are rebuilt.
“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,” said Masondo.
This article originally appeared on SAnews.gov.za.