Hollard, SA’s biggest privately owned insurance group, is being dragged into a business interruption claims debacle by Hollard Namibia, which is refusing to pay pandemic-related claims by two of that country’s best-loved tourism brands.
Gondwana Collection Namibia, a luxury hospitality and eco-tourism outfit, and the Naankuse Group, a conservation charity, accuse Hollard Namibia of going rogue by refusing to settle their Covid-19-related business interruption claims. The two groups have enlisted the help of specialist public loss adjuster, Insurance Claims Africa (ICA), which has spearheaded the fight against SA insurers that similarly refused to pay business interruption claims linked to Covid-19 until they were compelled to do so by the courts.
“Hollard Namibia seems to be adopting a Stalingrad strategy of delay, deny and defend,” said Ryan Woolley, CEO of ICA. “The simple fact is that extensive international legal precedent has been set that claimants who bought business interruption insurance that includes cover for infectious, contagious and notifiable diseases should receive the payouts they deserve. It is unreasonable and disingenuous to think that the circumstances of Hollard Namibia’s policies with their customers are materially different from Covid-19 business interruption claims in SA, the UK and the rest of the world.”
In an emotive virtual media briefing on Wednesday, Gondwana CEO Gys Joubert accused Hollard Namibia of being “aggressive and obstructive” and at one point broke down in tears when he revealed the group is “100% on an unsustainable path”.
Gondwana switched its insurance policy from Santam to Hollard Namibia in November 2019 and says it specifically highlighted the need for catastrophic risk cover as it was previously affected by tourism disruptions due to the September 11 terrorist attacks and the Sars (severe acute respiratory syndrome) outbreak. The eco-tourism group, which gets more than 90% of its guests from overseas, is insured for N$650m but is claiming N$360m from Hollard Namibia in line with its policy terms.
Despite having lodged its business interruption claim 12 months ago, Gondwana is still waiting for Hollard Namibia to pay. While the insurer has not outright refused the claim, it is withholding payment and says it still requires information that Gondwana refuses to provide.
The Naankuse Group, which operates lodges and spearheads several Namibian conservation efforts, says Hollard Namibia’s reluctance to pay its business interruption claim may force it to lay off more of its 220 staff, many of whom are from marginalised San communities.
“We are now faced with crippling legal costs as we try to hold Hollard Namibia to our contract,” said Dr Rudie van Vuuren, CEO of Naankuse, adding that the company has already cut 40 jobs. “We took out business interruption insurance specifically to prevent a sustainability crisis should something go wrong. We have been loyal customers for over 16 years, paying our insurance premiums on time every month.”
Hollard Namibia is a wholly owned subsidiary of Hollard International, which houses the group’s non-SA businesses in the rest of Africa, the UK, Asia and Australia. Hollard SA, which is a separate entity to Hollard International, was founded by the billionaire Enthoven family, which also has significant interests in Nando’s and owns the Spier wine farm.
ICA says Hollard Namibia should be paying out claims in line with Hollard SA following a precedent-setting December ruling by the Supreme Court of Appeal (SCA) that held local insurers liable for Covid-19 business interruption claims. But Pravin Kalpage, CEO of Hollard International, argues Hollard Namibia has “complied with both the letter and spirit of the law” in all pandemic-related business interruption claims.
“Hollard Namibia has studied all international judgments issued in respect of business interruption cover insofar as Covid-19 is concerned and have adopted all such rulings in formulating their settlement policy,” says Kalpage. “No two business interruption claims are the same and all such claims must be assessed on their individual merits.”
In the meantime, Gondwana and Hollard Namibia are due to face off in the high court of Namibia on Friday, with the insurer seeking to strike from the roll an urgent application launched by the eco-tourism group in December to have its grievances heard. Hollard Namibia argues the matter is not urgent and accuses Gondwana in court papers of trying to “jump the queue” in an attempt to choose its own trial date under the guise of urgency.
“To still be fighting while they should pay is strange and not what we’re experiencing from Hollard in other territories and SA,” said Woolley. “There are a lot of delays being put up to avoid the claim being decided.”
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