The SA Special Risk Insurance Association (Sasria), the only insurer in the country that provides cover against civil commotion, including strikes and riots, says it has to date received claims amounting to R14bn related to the July unrest sparked by the jailing of former president Jacob Zuma.
Sasria said it does not expect claims to exceed R20bn. While it’s unclear when all claims will be processed and paid out, the state-owned insurer anticipates that it will take between 12 and 18 months to “reinstate” all buildings and other properties destroyed during the unprecedented unrest that swept through parts of KwaZulu-Natal and Gauteng, leaving more than 300 dead and many more injured.
Sasria’s strategy manager, Themba Sibiya, said during a webinar organised by the departments of trade, industry & competition and small business development that while various estimates suggest losses above R50bn, the insurer’s own assessment puts losses at between R15bn and R20bn. The oft-cited R50bn figure includes indirect damage such as taxis not being able to operate at a particular place affected by the unrest, Sibiya said.
“Claims amounting to R14bn had been received to date ... all large losses are accounted for. It will take about 12 to 18 months to reinstate all the buildings,” Sibiya said.
He said most of the losses — 70% — were recorded in KwaZulu-Natal.
Sasria provides optional additional cover for damages caused by civil unrest or public violence up to a maximum amount of R500m per standard policy. Holders of private insurance policies pick the level of Sasria risk cover they require, and a levy is added to their insurance premiums, with the amount varying according to the level of cover they need.
Sibiya said that to facilitate quicker processing of claims, Sasria had to date made available R700m to other insurance companies to settle claims of up to R1m.
“For claims above a R100m there will be an investigation to quantify the damage, which is where we are now with most of the losses before payout is finalised ... post that, we will go to our reinsurers to claim,” he said.
Sasria takes cover of its own via reinsurers to mitigate the huge impact of claims.
The government has also established a fund amounting to about R4bn to assist businesses affected by the unrest as part of a broader R38bn social relief package targeted at unemployed adults.
The trade, industry & competition department set aside R2bn for the fund, while the Industrial Development Corporation (IDC), a key national development finance institution, and the National Empowerment Fund (NEF) will contribute R1.5bn and R250m, respectively.
At the same webinar, Susan Mangole, an acting deputy director-general at the department, said part of the emphasis of the fund will be on financing businesses that are not covered by insurance or those with funding insurance shortfalls.
Makhosonke Buthelezi, on behalf of the Unemployment Insurance Fund (UIF), the state agency tasked with providing short-term relief to workers when they become unemployed or are unable to work, said a temporary fund had been established to assist those affected. The fund targets workers who have lost an income or have not been paid in full due to the closure of a workplace as a result of the unrest.
The UIF scheme will provide qualifying workers with a monthly flat rate of R3,500, which will be paid directly to the employee. Payments will be backdated to July and run until December 15, and will be reviewed every two weeks. Buthelezi said applications are due to be accepted from August 25.
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