The South African Special Risks Insurance Association (Sasria) said on Tuesday it had received a total of 14 051 claims, valued at R32-billion, relating to the unrest in the KwaZulu-Natal and Gauteng in July.
Eighty percent of the claims relate to damage in KwaZulu-Natal, with the rest for Gauteng. There were no claims from other provinces.
Of all claims received, R12.6-billion has been paid out as of 15 November, with a target of settling 80% of claims up to R60-million by March 2022, the state-owned insurer told a media briefing.
This follows a R11-billion allocation from Finance Minister Enoch Godongwana during his medium-term budget policy statement last week towards the claims and to recapitalise Sasria.
Sasria managing director Cedric Masondo said that when the riots began at Mooi River, the insurer thought it would just be “one of those riots”, but soon realised that claims from the unrest would consume its reserves and it would not have enough to remain capitalised, because it had a R10-billion balance sheet at the start of the year.
Recently, the treasury said it had disbursed R3.9-billion to Sasria to cover claims after the insurer told parliament’s standing committee on appropriations in September that it needed a capital injection from the government to cover any shortfalls.
“Our plan is to be profitable in 2022-23. We do expect riots, but we expect they will be within our financial capability,” Masondo said on Tuesday.
Of all the claims received, the bulk, in both numbers and rand value, relate to commercial fires, heavy commercial vehicles, light commercial vehicles and business interruption. Most claims — 12 050 — fell into the less than R1-million bracket, with a total claim value of about R2.26-billion.
Masondo said he could not divulge who Sasria’s clients were, but the biggest claimants were retailers, malls and warehouses, with R1.5-billion maximum cover.
Masondo noted that there had also been incidents of fraud and the inflation of claims. Because of this, “we have made our loss adjusters the first gatekeepers, ensuring that claims reach Sasria and an internal team makes further rigorous assessments, in line with our standard quality-control processes”, he said.
Sasria’s executive manager of operations, Fareedah Benjamin, said that since the July unrest there had been a shift in the insurer’s risk profile.
There had also been an increase in the number of previously uninsured companies approaching Sasria for cover, Benjamin said.
Anathi Madubela is an Adamela Trust business reporter at the Mail & Guardian.