Quake raises questions about insuranceComment on this story
Johannesburg - The 5.5 magnitude earthquake which hit the North West province raises questions about whether the insurance industry is prepared to deal with natural disasters, an insurance company said on Wednesday.
"The tremor... provides a wake-up call to the insurance industry about the need to prepare effectively for large scale disasters," MUA Insurance Acceptance managing director Christelle Fourie said in a statement.
One person was killed and at 34 were injured when the earthquake hit shortly after midday on Tuesday, causing scares in mining operations and evacuations in parts of the country.
People in Gauteng, KwaZulu-Natal, Free State, and the Northern Cape reported feeling the quake, as did people in neighbouring Mozambique and Botswana.
In 2012, the CATDAT Damaging Earthquake Database found that only 7.5 percent of earthquake-related losses were covered by insurance companies.
The database by Wills Research Network compiles information on global "catastrophes".
Fourie said the CATDAT statistics raised important questions over the preparedness of insurance companies to help the rebuilding process.
"While it has yet to be proven that earthquakes are related to climate change, insurance and reinsurance companies have been among the first companies to start feeling the effects of natural disasters in the form of increased payouts related to severe weather events like floods and storms," she said.
"In South Africa, most insurance companies are aware of the implications of climate change but more does need to be done in order to better understand its full impact.
Fourie said South Africa had become "relaxed" about disaster risks.
"Due to the fact that South Africa is not a country with a recent history of extreme natural disasters, we have become somewhat relaxed about disaster risks, let alone the possibility of loss accumulation.
"Part of the problem is that the memory of an extreme natural disaster lasts for only one generation. If it survives, it does so merely as anecdote."
Seismology experts say South Africa's potential for earthquake damage comes in the form of natural seismic activity, mining-related events from deep underground mining, and earthquakes that occur outside our borders but are nevertheless strong enough to create some kind of effect.
"While the risk facing South Africa is certainly not as significant as a number of other regions, the insurance industry is aware of earthquake risk and has factored it into premiums," said Fourie.
"But it might take a larger, seismic event, to test just how seriously it is rising to the challenge."
The SA Insurance Association (SAIA) said it had "taken note" of the earthquake and its impact on the country.
"The SAIA and its members are still assessing the situation. Once the SAIA and its members have received more clarity on the impact of the event, we will be in a better position to shed more information on the matter," spokeswoman Claire Norman said in a statement.
"Earthquakes generally are considered by the insurance community to be one of the largest risks, which could be catastrophic to people, the environment, business, the government and the economy."
The SAIA advised customers affected by the earthquake to get in touch with their insurers to have the damage assessed. - Sapa