Nearly three months after the July riots, which saw businesses in KwaZulu-Natal and Gauteng vandalised and looted, the treasury announced that R3.9-billion will be disbursed to the South African Special Risk Insurance Association (Sasria) to cover claims.
This comes after Sasria briefed members of parliament’s standing committee on appropriations last month on its need for a capital injection from the government to cover any shortfalls in paying out insurance claims.
Sasria covers claims resulting from riots, civil unrest and terrorism and vandalism caused by public disorder.
“The treasury has indicated that R3.9-billion will be disbursed to Sasria following the conclusion of the recently tabled Special Appropriation Bill parliamentary processes,” read a joint statement from Sasria and the treasury on Monday. “This is intended to assist Sasria in meeting its obligations until the end of the current financial year … on 31 March 2022.”
The state-owned insurer has been inundated by claims from business owners whose livelihoods were harmed by the looting and destruction, which initially started as a protest against former president Jacob Zuma’s incarceration.
Sasria managing director Cedric Masondo has previously said claims linked to the July violence could amount to between R20-billion and R25-billion.
The government, as the sole shareholder in the insurance company, has committed to standing in as Sasria’s insurer of last resort so that it meets its policyholder commitments.
Masondo said on Monday that discussions with the treasury were focused on the best medium to inject capital “as we look at how to be future-proof ready and acknowledge the lessons learnt during the unfortunate unrest in July”.
The treasury said: “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,” it added.
Sasria and the treasury said almost 100% of claims notifications had been received and claims totalling more than R5.8-billion had already been paid out.
The insurer said that after discussions with industry partners, it had been agreed that damaged property would be rebuilt, rather than cash-in-lieu payments.
Anathi Madubela is an Adamela Trust business reporter at the Mail & Guardian.