We have money to pay out unrest claims, says state insurer Sasria

The South African Special Risk Insurance Association (Sasria) says it has sufficient reserves to meet all valid unrest-related claims.

Although the parliamentary processes for additional government support is being finalised, “Sasria remains liquid and continues to trade as usual”.

It has been over two months since the unprecedented chain of events transpired in KwaZulu-Natal and parts of Gauteng that left businesses looted and destructed.

“Work has been underway since then to address the damages incurred and assist businesses to start operating again,” said Sasria’s managing airector Cedric Masondo.

Masondo said recent media reports had raised concerns among policyholders and the public at large regarding Sasria’s ability to honour claims following the unrest.

“These [concerns] are valid and noted. Sasria has made important business interventions, namely capital and reinsurance restructure, and government, as the sole shareholder, has committed to stand in as the entity’s insurer of last resort,” said Masondo.

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Progress update on the settlement of claims

Sasria said it remains committed to honouring all eligible claims and it has implemented the following plans to expedite claims payments:

• Almost 100% of claims notifications have been received and they are in the process of loss adjustment.
• To date, claims amounting to over R5.8 billion have been paid.
• All claims below R1 million to be settled and paid in full quicker.
• Agent companies are working hard to make sure that these claims are paid as quickly as possible.
• Sasria is determined to settle 80% of all claims between R1 million and R30 million by the end of October 2021.
• Sasria has started paying interim payments as proposed by loss adjusters on all claims above R30 million.
• Ensure that at least 30% of total claim value for big claims is paid in the next couple of weeks.
• Sasria has beefed up resources to reduce any possible delays processing claims.
• All outstanding reports will be finalised in the next two weeks and necessary payments will be made.
• Sasria has engaged with industry partners and reached an agreement that the damaged properties will rather be rebuilt, instead of cash, payments.
• Collaborative work with loss adjusters and the industry will be done to ensure that the buildings are rebuilt.

Treasury’s R3.9 billion assistance

National Treasury said R3.9 billion would be disbursed to Sasria following the conclusion of the recently tabled Special Appropriation Bill parliamentary processes.

This is to assist Sasria in meeting its obligations until the end of the current financial year, which ends on 31 March 2022.

“Our discussions with National Treasury are in line with the desired determination of the best medium that can inject capital, as we look at how to be future-proof ready and acknowledge the lessons learnt during the unfortunate unrest in July,” said Masondo.

He said Treasury was aware that it would need additional government support and the two bodies were working closely to finalise the actual required financial support.

But additional support is dependent on how swiftly Sasria can finalise the total claim amounts.

It is expected that the additional support will be concretised in the 2022 Budget.

“Sasria continues to play a key role in the insurance industry. We urge clients to continue and maintain their policies with Sasria and would like to assure them of our determined resilience to maintain our excellent relations”, concluded Masondo.

Compiled by Narissa Subramoney

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Sasria can finalise the total claim amounts. It is expected that the additional support which has
been flagged in the recent special appropriation will be concretised in the 2022 Budget.

Sasria has sufficient reserves including through its reinsurers to meet all valid claims. While
the Parliamentary processes for additional Government support is being finalised, Sasria
remains liquid and continues to trade as usual.

Progress update on the settlement of claims
Taking into account the mammoth task currently underway, Sasria remains committed to
honouring all eligible claims; and have implemented the following plans to expedite claims
payments:
1) Almost 100% of claims notifications have been received and they are in the process of
loss adjustment;
2) To date, claims amounting to over R5.8 billion have been paid;
3) All claims below R1 million to be settled and paid in full quicker, and the Agent
companies are working extremely hard to make sure that these claims are paid as
quickly as possible;
4) Sasria is determined to settle 80% of all claims between R1 million and R30 million by
the end of October 2021;
5) Sasria has started paying interim payments as proposed by Loss Adjusters on all big
claims (above R30 million), and are determined to make sure that at least 30% of total
claim value for big claims is paid in the next couple of weeks;
6) We would like to assure clients that we have added resources to reduce any possible
delays in the processing of claim payments
7) We are confident that in two weeks, we would have attended to all outstanding reports
and made necessary payments; and
8) Sasria has engaged with industry partners and reached an agreement that the
damaged properties will rather be rebuilt, than do cash in lieu payments. Collaborative
work with loss adjusters and the industry will be done to ensure that the buildings are
rebuilt.
“Sasria continues to play a key role in the insurance industry. We urge clients to continue and
maintain their policies with Sasria and would like to assure them of our determined resilience
to maintain our excellent relations”, concluded Mr Masondo.