SA Special Risks Insurance Association (Sasria) has processed about R12.6bn worth of claims relating to the civil unrest in July out of the estimated R32bn total.
But MD Cedric Masondo said on Tuesday that Sasria was on track to settle all the remaining claims after the receiving an additional R11bn government last week in the medium-term budget policy statement.
This is on top of R3.9bn that the National Treasury had in October granted the state-owned insurance company, which was thrown a curve ball by the sheer volume of claims coming from their clients, including retailers and property landlords.
The civil unrest, which saw more than a week of looting frenzy, also brought into sharp focus SA’s high unemployment rate.
Sasria aims to settle 80% of claims of up to R60m before the end of the financial year in March 2022.
“Just injecting capital alone is not enough, but capital will help us in terms of dealing with paying claims, but also being capitalised. We don’t have a liquidity problem at this stage. We are paying claims as we should be paying them,” Masondo said.
Sasria, which provides cover against risks such as civil commotion and public disorder, said 80% of the 14,051 claims originated from KwaZulu-Natal and the rest in Gauteng.
The riots, which were triggered by the arrest of former president Jacob Zuma for defying the Constitutional Court’s ruling that ordered him to answer allegations of state capture before the Zondo commission of inquiry, targeted malls, warehouses and factories, in particular.
Massmart, the owner of retail store chain Game, was one of the retailers hard hit by the July events that also dented SA’s image among potential investors.
Masondo said while progress was being made, the state insurer also had challenges relating to internal capacity to manage large losses, overstretched loss adjusters and clients’ struggles with the formulation of claims, which had resulted in delays in the processing of claims.
“Sasria would like to extend its gratitude to the National Treasury for the additional R11bn allocation as this would significantly contribute towards honouring clients’ claims and recapitalising the organisation,” Sasria said.
“The company also extends its appreciation to the insurance industry for their overwhelming support. Many clients that suffered great loss were assisted to maintain their business operations and minimise the loss effect.”
Sasria said it expects to be profitable by the 2022/2023 financial year.
The total cost of the claims, which include those that fall outside Sasria’s scope, is estimated at R50bn.
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