Sasria has managed to turn the tide on its loss from the 2021 unrest, and the state insurer has told parliament it expects premiums to increase by R6bn by the end of this year.
Sasria CEO Mpumi Tyikwe told parliament’s standing committee on finance that when he joined the company Sasria had capital of about R10bn and that this had grown to R25bn. Two instances of rate increases, after the 2021 unrest and in October last year, have positioned Sasria for stability.
He said the company’s 10-year average loss ratio was over 1000% when counting the unrest event, but when his was not taken into consideration, the ratio went down to 30.3%.
“From a premium income point of view, the business has doubled in size. We used to be a R3.1bn company. By this year’s end, I can confidently say that we are going to achieve R6.4bn of premium increase… and that is influenced partly by the rate increases that we did immediately after July 2021 and the ones that we did just now on the first of October last year.”
He reminded MPs that Sasria suffered a R24bn loss as a result of the impact of the July unrest in 2021 in KwaZulu-Natal, Gauteng, and parts of Mpumalanga province. He said Sasria achieved a short circuit cover ratio of 400% at the end of 2025 after targeting 230%.
While the state of the insurer was looking better than in 2021, Tyikwe cautioned that discipline remained crucial. The business had R21.6bn in available capital at the end of December, and is targeting R30bn in available capital by 2029.
“The appropriate approach for Sasria is to look at how much or what event it can handle on its own without getting government support. So, that number, Sasria, today can handle an amount from an event with a loss of R25bn, which is a combination of our own funds and the reinsurance that we have been able to negotiate for this year.”
He said Sasria successfully reintroduced the Wrap Cover product in April, which is a primary coupon that offers additional insurance capacity for companies with substantial asset bases and concentrated business interruption risk.
He said outside the country, Sasria successfully renegotiated with reinsurers in the London market for competitive rates. Sasria will retain 20% of the risk in the Wrap Cover, allowing for a maximum of R500m to be paid to an insured party.
He says geopolitical tensions, including the US-Iran war, are expected to raise reinsurance risks for the type of risk that Sasria covers. He said unrest risks linked to stubborn unemployment and persistent inequality domestically were risks Sasria continued to monitor.
In Sasria’s latest integrated report, finance minister Enoch Godongwana said Sasria was exploring ways to expand its mandate to encompass climate-related risks, and engagements with stakeholders continued.
“As South Africa contends with the increasing frequency and severity of climate events, such as floods, droughts, and other natural disasters, there is a clear and urgent need for innovative financial instruments to manage these risks.
“I welcome Sasria’s proactive engagement with the government, regulators, and stakeholders in this regard, and I am confident that these efforts will lead to new and/or improved mechanisms to assist in protecting public and private assets in the face of environmental volatility.”
The minister said the turnaround of Sasria was the result of sound leadership, prudent financial management, and a clear strategic vision aligned with national priorities.
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