CAPE TOWN - The devastating storm that wrecked parts of KwaZulu-Natal and Mpumalanga earlier in October will now leave the insurance industry trembling.
Over R1bn is expected to be claimed by insurance companies, reports MoneyWeb.
“The estimate by re-insurers is that the total damage is between R1 billion and R1.5 billion for the industry", chief operating officer of Discovery Insure, Francois Theron told Moneyweb.
Despite the company refusing to disclose the extent of estimated costs associated with the damage, its data displayed that the storm damage in Johannesburg was "much larger" than in KwaZulu-Natal.
The country's largest general insurer, Santam is processing more than 4 000 general claims related to flooding in Durban and damaging hailstorms in parts of Gauteng. Including more than 1000 motor vehicle claims.
“In both Durban and the affected cities in Gauteng, the majority of claims are for non-motor items such as damages to homes and the contents of homes and businesses. In Gauteng, our non-motor claims include a few large agriculture and commercial entities that were affected by the tornado and hail storm”, said Santam’s executive head of claims and group sourcing, Ebrahim Asmal.
Similarly, Santam subsidiary, MiWay told Moneyweb that it has received more than 1000 motor vehicle claims. These claims amount to an estimated R17 million.
Old Mutual Insure
Old Mutual Insure who also failed to provide estimated costs on the claims received, said that the industry is experiencing a rising trend in claims due to inclement weather. The company added that these claims are expected to increase as the country heads into the rain and hail season.
The insurer allegedly told Moneyweb that it has pledged R500 000 to assist flood victims and has extended its office hours to 7pm for claims notifications.
A portfolio manager at PSG Wealth, Adrian Cloete said that insurers are theoretically liable for damage-related costs up to a certain amount. Also, this is applicable at which point their own disaster policies come into effect. Insurers purchase catastrophe cover from reinsurers so as to reduce some of the financial risks associated with underwriting policies in the event of a catastrophe.
However, Independent Media reported yesterday that Durban resident, Ishara Naidoo is one of many residents in Durban South that are waiting for aid from the eThekwini Municipality. Upon being hit by the devastating storm, Naidoo’s home has been severely damaged. She has also lost possessions to thieves such as her home’s tin sheeting.
In the interim, the Isipingo Women’s Forum (IWF) has stepped in to co-ordinate relief efforts with assistance from the Al-Imdaad Foundation. IWF co-ordinator Zarina Assan said they had supplied a few affected residents with grocery hampers and sheets of roofing, but she was desperate to get more building material.
- BUSINESS REPORT ONLINE