Insurance industry service providers are responding as well as they can, given the sheer number of people and sectors affected, says Norman Hornby, the CEO of loss adjusting firm Crawford & Company SA.

With more than 440 lives claimed, an estimate by Premier Sihle Zikalala of R12b for rebuilding and repairing infrastructure, and hundreds of homes and businesses damaged or destroyed, the industry faces tremendous challenges in processing the flood of claims.

WATCH: Loss adjusting firm Crawford & Company SA CEO Norman Hornby talks to Izak du Plessis about the impact of the floods on the insurance industry.

According to Hornby, the burden is even bigger than it was after July’s unrest, which cost the industry R34b.

“It is devastating, and although role players are trying their best, there are limits to what they are being able to do because no one can ever be ready for a tragedy of this magnitude,” says Hornby.

“From a claims perspective and a volume perspective, to physically deal with the claims, and ultimately adjust the claims, is near impossible, because the loss adjusting process in its purest form will just take too long to complete.”

As a result, the industry will have to think out of the box, he says.

The shortage of contractors in South Africa, the scarcity of building materials as a result of Covid-19, the infrastructure damage and the absence of proper water and power provision in certain areas all add to the challenges.

There will be no quick fix, he says.

However, despite the magnitude of the disaster, the insurance industry will financially be able to handle claims because insurance companies have reinsurance cover.

“However, the effect for the consumer will be increased premiums as insurance will get more expensive,” says Hornby.

The other challenge arising from the floods is the possibility of fraudulent claims, which will further strain the claims process, he says.