The state’s disaster insurance company is studying the possible expansion of its mandate to include coverage for terror-linked cyberattacks and climate change-related weather events, with a feasibility report to be handed to the National Treasury by November.
South African Special Risk Insurance Association (Sasria) CEO Mpumi Tyikwe told Business Times this week expanding the mandate would require new legislation, which could take two years.
“Currently, we’ve got a certain mandate that we cover political violence, terrorism, and civil unrest. That is what the law allows us to do,” Tyikwe said, noting there had been a rise in such events.
“The government has chosen not to enter spaces where the private sector is already efficient… The intention is to go into areas where the private sector no longer has an appetite, but for our own economic development we have to provide that insurance.”
The study into broadening Sasria’s mandate comes as extreme weather events take a growing toll on economies. SOEs such as Transnet and SAA have also been hit with cyberattacks in recent years.
Tyikwe said the National Treasury was working with the World Bank and the International Monetary Fund (IMF) on the initiative.
“We have sent various proposals to the National Treasury as to how we can handle future disasters. The critical question is how you fund them… The World Bank and the IMF are busy with that particular process. We have contributed to it, and then they are supposed to make recommendations to Treasury.”
He said the Land Bank was also in discussions with Sasria about collaborating to provide comprehensive support. Sasria expects to submit a report to Treasury by November.
“We are trying to find ways to diversify income, but more importantly, what we are really trying to do [is make sure that] insurance facilitates investment. So, if people have got comfort that should they be faced with a particular risk and there is someone who can provide cover for it, then they will invest in that particular area.”
If people have got comfort that should they be faced with a particular risk and there is someone who can provide cover for it, then they will invest in that particular area
— Mpumi Tyikwe
Speaking at a conference of the International Forum of Terrorism Risk Re-Insurance Pools (IFTRIP) in Cape Town this week, finance minister Enoch Godongwana said Sasria’s coverage had been widened as a result of the 2021 riots in KwaZulu-Natal, showing its critical role in the government’s response to disasters and political risks.
“As we face evolving risks, including natural disasters exacerbated by climate change, it is essential to explore new instruments of protection and the increased need for state-backed resilience,” Godongwana said.
“This may include the possible expansion of Sasria’s mandate. Therefore, we invite dialogue on how international partnerships and global expertise can help to codesign such solutions in a financially sustainable and inclusive manner.”
Steven Seitz, president of IFTRIP and director of the federal insurance office at the US Treasury, said his association and the US government valued international partnerships and opportunities to work on the terrorism risk.
“We recognise that today’s risks transcend borders, requiring co-ordinated strategies among our IFTRIP member countries... In an era defined by rapid change, emerging technology and evolving threats, no single institution, market or government can address these challenges alone.”
According to the latest global terrorism index from the Institute for Economics and Peace research and training organisation, released in March, the number of countries experiencing at least one terrorist incident rose from 58 in 2023 to 66 last year.
“In 2024, more countries deteriorated than improved for the first time in seven years, with 45 countries reporting a higher impact from terrorism, while only 34 showed improvement.”
Sasria has had to work to rebuild its capital base after processing claims over R32bn related to the July 2021 unrest in KwaZulu-Natal and Gauteng, highlighting the need to focus on long-term financial sustainability amid future uncertainties.
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