Billions of insurance claims in South Africa

Claims for damage and theft from businesses affected by civil unrest in South Africa are likely to be between R7 billion and R10 billion, the head of the only insurer covering political violence in the country told Reuters.Days of riots and looting have left more than 70 people dead, hurt thousands of businesses and damaged major infrastructure in some of the worst civil unrest in decades.Triggered by the jailing of ex-president Jacob Zuma last week after he failed to appear at a corruption inquiry, it has widened into an outpouring of anger over poverty and inequality.Sasria, a state-owned insurer set up after private firms stopped underwriting risks relating to political violence due to unrest during apartheid, has received around 100 million rand in claims so far, its managing director Cedric Masondo told Reuters, adding this was expected to rise significantly.The company, the only insurer to offer cover for such risks, expects total claims of up to R10 billion, or R12 billion in a worst-case scenario making the unrest likely the most significant event in terms of the value of claims since Sasria was set up in 1974, Masondo continued."This is the worst in terms of financial magnitude," he said. Masondo said while Sasria has re-insurance cover that runs into the high single digits and can fund up to R10 billion of claims from its own balance sheet, it only covers customers up to a threshold of R500 million.This will mean smaller firms will likely see their losses insured in full, while major companies that have suffered significant damage are likely to have to shoulder some of the cost themselves.Some 40 000 firms have been affected in the Ethekwini municipality in the province of KwaZulu-Natal alone, with damages in the area put at R15 billion, according to its mayor. Violence has been concentrated in KwaZulu-Natal, Zuma's homeland, as well as the country's economic and financial centre of Johannesburg and surrounding areas in the Gauteng province. Durban port South Africa's Durban port has suffered major disruption after days of unrest, and operations have also been badly affected at the Richards Bay port and on a national freight rail line, logistics and freight companies said on Wednesday.Durban has one of the busiest shipping terminals on the African continent, and is a hub for exports including agricultural commodities and imports like crude oil and petroleum products. Richards Bay is home to a major coal export terminal.State logistics group Transnet said in a statement that service levels at Durban and Richards Bay were impacted "as the entire supply chain is closed," including roads into and out of the ports.The South African Association of Freight Forwarders told Reuters that port health services at Durban had been closed, effectively preventing vessels from berthing because Covid-19 testing could not be carried out."This situation is exacerbated by launch crews also not being available," it said. Juan Enslin, managing director at Leschaco Group, said his logistics firm had to leave several containers in Durban port for safety reasons."We therefore will fall way behind in our delivery schedules. Cargo that has been on the road was also diverted," he said.On the impact on freight rail, Transnet said force majeure had been declared on the NATCOR rail line that connects Durban to Gauteng province that is home to the country's financial and economic powerhouse, Johannesburg.Force majeure allows certain terms of an otherwise legally binding agreement to be waived due to unavoidable circumstances.Transnet said it was deploying resources to avert commercial fuel operations being affected, after being served with a force majeure notice by the SAPREF oil refinery. -Nampa/Reuters

Billions of insurance claims in South Africa

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Billions of insurance claims in South Africa

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