SA’s largest short-term insurer, Santam, has deployed rapid-response teams to the storm-ravaged Western Cape, bracing itself for a high number of claims, particularly in the wine-rich area of Franschhoek.
This comes as heavy downpours across large parts of the Western Cape wreaked havoc over the long weekend with several rivers breaking their banks, causing flood-related damage while landslides and rockfalls forced the closure of all major roads leading into Cape Town.
According to data supplied by the SA Weather Service, over a two-day period from September 24-26, parts of the Overberg region received up to 299mm rain, Stellenbosch in the Winelands district recorded 194.2mm, and 141.8mm of precipitation was recorded at the Molteno Dam in Cape Town.
Santam, which is valued at about R34.2bn on the JSE, told Business Day that while it was still too early to quantify the extent of the damage or how much the claims will amount to, “what is certain is that there will be claims”.
Santam said it has received initial reports that confirm areas affected by the inclement weather include the West Coast; the Winelands region, especially Franschhoek; Southern Cape; and Garden Route.
Famous for being the culinary capital of SA, Franschhoek boasts one of the country’s best wine valleys, which produces some of the world’s best wines and contributes significantly to SA’s GDP.
According to the latest harvest estimate by the SA Wine Industry Information and Systems (SAWIS) the country’s 2023 wine grape harvest is estimated to be 14.2% smaller than the 2022 one.
Now the disruptive rain and gale-force winds pose a deeper threat to the wine industry alongside the broader agricultural industry in the Western Cape, which yields about half of all the wheat grown in SA and citrus.
Short-term insurer Outsurance said climate change is causing more frequent and more severe weather-related events in SA and globally and warned that it could cause higher premiums as claim frequency increases.
Interiors damaged
Echoing Santam’s view that it is too soon to provide feedback on the cost of the devastation, Outsurance told Business Day it has so far received about 400 claims relating mainly to property building and contents damage.
The R65.7bn JSE-listed insurer said the heavy, prolonged rains caused roofs to start leaking resulting in water entering via roofs and ceilings, damaging the interior of homes.
“It has also caused storm water drains, dams, rivers and swimming pools to overflow which has caused flooding,” Outsurance said. “The strong wind has also damaged roof tiles, sheets and fascia boards.”
Momentum Insure said it is tracking 100 claims with an estimated loss of less than R5m, “but it is early days and movement in any direction is expected”.
The insurer owned by Momentum Metropolitan Life said it has about 15% of its total exposure in the Western Cape.
Santam said while it will take time for clients to assess, do damage control and notify it of their claims, the company has meanwhile deployed rapid-response teams to the affected areas.
“We are assisting affected clients to deal with the aftermath of the floods,” the group said. “It usually takes a few days for the volumes to come in and for our understanding of the event to mature.”
The Stellenbosch municipality on Tuesday said cleanup operations are under way in Franschhoek, though some areas are still without electricity as a substation is still flooded, while other areas are grappling with water outages due to burst pipes, with some clinics remaining temporarily shut.
Western Cape local government, environmental affairs and development planning MEC Anton Bredell said the province should further invest in early-warning infrastructure and ensure new infrastructure is designed with adjusted climate change parameters in mind.
“Though it is still too early to calculate the cost of this storm, if viewed in the context of the June floods, and the recent coastal damages due to storm surges, this is becoming a very expensive winter for the Western Cape,” said Bredell.
An unknown number of people have died, according to Bredell’s office.
The disaster response of the Western Cape government to the severe weather shifted from saving lives to recovery and humanitarian aid co-ordination on Tuesday, it said.
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