South Africa’s property and casualty insurers face an even tougher year than expected after Cape Town experienced its worst storm in 30 years and dozens of fires engulfed the region around the town of Knysna this week. The insurers, including Santam, Old Mutual’s Mutual & Federal and Rand Merchant Investment Holdings’ OUTsurance unit, are already being battered by an economy that slipped into a recession in the first quarter, the country’s credit rating downgrade to junk status, continued political turmoil and unemployment at a 14-year high.
The expected influx of claims may not push the bigger property and casualty insurers into losses for the year, but companies like Zurich Insurance South Africa and Auto & General Insurance may struggle, some analysts have indicated.
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In the aftermath of the devastating fires raging in Knysna last week, Old Mutual Insure revealed information based on claims by clients. Old Mutual Insure has released some initial claims numbers, as below:
Old Mutual Insure has had about 280 claims exceeding R260m (for the fires only) to date, both likely to increase.
Old Mutual Insure are making interim payments of between R10,000 and R50,000 on registration of claims.
The insurer has also made a R15m payment on the claim for Woodridge College on the day the claim was reported.