The South African Special Risks Insurance Association (Sasria) said yesterday it has so far paid more than R5.8 billion in claims to businesses affected by civil unrest in July.
The state-owned insurance company estimates the total number of claims will reach between R19bn and R20bn, with Treasury indicating that additional funds will be disbursed to the insurer.
Thousands of businesses were looted, destroyed and burned down during unprecedented civil unrest in KwaZulu-Natal and Gauteng in July, which left an estimated R50bn in economic destruction in its wake.
Sasria also said it had received almost 100 percent of claim notifications, which were now in the process of loss adjustment.
It said it was determined to settle 80 percent of all claims between R1 million and R30m by the end of October this year.
Interim payments of at least 30 percent of total claim value for big claims, those above R30m, would also be paid in the next few weeks.
Sasria managing director Cedric Masondo said work was underway to assess the damages incurred and help businesses start operating again.
He said recent media reports, which had raised concerns among policyholders and the public regarding Sasria’s ability to honour claims following the unrest, were valid and noted.
He said Sasria had made important business interventions, such as capital and reinsurance restructuring, and the government had committed to stand in as the entity’s insurer of last resort.
“Our discussions with the National Treasury are in line with the desired determination of the best medium that can inject capital, as we look at how to be future-proof ready and acknowledge the lessons learnt during the unfortunate unrest in July,” Masondo said.
Treasury had indicated that R3.9bn would be disbursed to Sasria after the conclusion of parliamentary processes around the recently-tabled Special Appropriation Bill.
This was intended to assist Sasria in meeting its obligations until the end of the current financial year, which ends on March 31, 2022.
Treasury said it was aware, through regular engagements with Sasria, that additional government support would be required.
Treasury said it was working closely with Sasria to finalise the actual financial support needed.
“The final additional support is dependent on how swiftly Sasria can finalise the total claim amounts,” Treasury said in a statement.
“It is expected that the additional support, which has been flagged in the recent special appropriation, will be concretised in the 2022 Budget.”
Sasria has estimated that the total number of claims will reach R19bn to R20bn.
Masondo reiterated that Sasria has sufficient reserves, including through its reinsurers, to meet all valid claims.
He said that while the parliamentary processes for additional government support were being finalised, Sasria remained liquid and continued to trade as usual.
BUSINESS REPORT ONLINE