South Africa’s insurance industry is waiting with bated breath as claims roll in for damage caused by the freak tides that hit the KwaZulu-Natal coast last week.
More than 300km of the KwaZulu-Natal coastline needs to be reconstructed after it was devastated by 8m waves that struck in the early hours of March 19.
Insurance companies and analysts were hesitant to estimate how big a hit the insurance industry was set to take, claiming that it was still early days.
Durban’s city manager, Michael Sutcliffe, confirmed earlier this week that the city was looking at an R85-million repair bill.
Provincial and Local Government Minister Sydney Mufamadi visited the affected coastline this week and confirmed that he would be submitting a report to the national treasury to secure funding to assist with reconstruction work.
Mutual & Federal’s general manager of claims, Howard Cohen, said the freak tides are a significant insurance event. According to Cohen, Mutual & Federal have received only 1Â 200 claims so far, but he stressed that his gut instinct told him that this was just the start.
“Twelve hundred claims would be quite an encouraging conclusion for us,” said Cohen, “but I don’t think this is the end of the story for us.”
Santam’s regional manager for KwaZulu-Natal, Daniel Stevens, said the insurance company had already received 220 claims, but stressed that this included damage claims from the electrical storm that hit Durban the week before.
“It’s a bit early to say,” said Stevens. “It takes a few weeks for people to come forward.”
Stevens said a lot of the damaged properties could be holiday homes and the owners may not have had time to visit the sites to inspect the damage.
The South African Insurance Association spokesperson, Viviene Pearson, said it is too early to calculate the magnitude of the damage, but that insurance companies had received quite a few claims. She also believed that it would take a few months to get an accurate picture of the damage costs.
A short-term insurance analyst, who did not want to be named, said the insurance industry would mostly be covered by its own catastrophe insurance and that he did not expect the net exposure per company to exceed R100-million each.
“In fact, it will probably be a lot less, maybe closer to R10-million each. We can be very happy that it did not happen in Clifton, where properties are worth a lot more,” the analyst said.
“A hailstorm on a Friday afternoon in Gauteng probably does a lot more damage,” he added.