Facing pressure from clients, state-owned insurer SA Special Risk Insurance Association (Sasria) has withdrawn a circular stating it would not pay claims in the event of a total collapse of the electricity grid.
Sasria, which provides cover for strikes, riots and other forms of civil unrest, previously said from June 1 all its existing and new policies will exclude cover for electricity grid failure.
The updated circular, dated May 5, which was sent to Sasria’s agent companies and intermediaries, cited “insufficiency in respect of the implementation period stipulated in the circulars and this has resulted in an undue and inadvertent difficulty for the affected parties”.
The withdrawn document comes a month before the winter season in which energy demand is expected to peak. Eskom is currently implementing stage 6 load-shedding where as much as 6000MW is removed from the national electricity grid.
The previous circular, which was sent out at the end of April, exempted Sasria from paying claims that were made as a result of a complete grid collapse.
Despite Eskom implementing some of the most frequent and intense power blackouts since it first implemented load-shedding in 2008, electricity minister Kgosientsho Ramokgopa told the National Council of Provinces (NCOP) on Tuesday that the country is unlikely to face a complete collapse of the grid, citing a 2,200MW reserve margin.
“There is what you call a reserve margin of 2,200MW that are kept at every given time by the system operator in Gauteng. We are unlikely to have a grid collapse [or] blackout, because of that 2,200 reserve margin,” Ramokgopa told delegates.
After the July 2021 unrest, the government received higher than expected claims from policyholders stemming from the destruction and looting during the period. The unrest significantly diminished Sasria’s financial position, leading the National Treasury to grant it a bailout of R22bn in the 2021/2022 financial year.
The funds ensured that Sasria was able to cover its total claims of R32bn and also assisted the entity to recover its solvency ratio in line with the requirements of the Prudential Authority.
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