News / South Africa

Yadhana Jadoo
2 minute read
12 Oct 2017
5:20 am

Weather-related catastrophes cost world economy R2.3 trillion in 2016

Yadhana Jadoo

Insurance technical advisor says South Africans need to plan adequately for losses.

Wayne Mooi, manager at Honeydew Panel Shop, looks up at the damaged roof of his workshop, 10 October 2017, in Honeydew, after a storm ripped through the area leaving widespread damage in its wake. Picture: Michel Bega

With more freak storms expected this spring and summer, it is important to protect assets which could be damaged by heavy winds, rain, flooding and hail, according to insurers.

Parts of Gauteng and KwaZulu-Natal experienced torrential downpours this week due to what scientists point to what may be the effect of climate change and global warming.

According to Susan Walls, insurance technical advisor at the South African Insurance Association (SAIA), it is imperative assets are protected for all eventualities.

One of the best ways of ensuring that you are protected against damage caused by storms, water damage, flooding, hail and wind is to purchase protection by means of an insurance policy, she said.

“This type of cover is available from insurers and one should always make certain that they are fully informed of the cover provided by their insurance policy and if there are any circumstances in which there will be no cover,” she said.

Adding to the topic is ClimateWise, a coalition of global insurers, brokers and industry service providers in weather-related catastrophes such as floods, windstorms and droughts.

They say these occurrences have increased 600% since the 1950s, and cost the world economy $170 billion (about R2.3 trillion) in 2016 alone, five times more than the 1980s and a huge leap up from the $103 billion in losses recorded in 2015.

“Closer to home, flood events in 2016 racked up R700 million in insured losses, while the recent Knysna fires and Cape Town storms in June clocked in at over R4 billion in damages. Alarmingly, the gap between the cost of weather catastrophes and the insured values is growing,” said Mandy Barrett of insurance brokerage and risk advisors at Aon South Africa.

“The downpours happen in a matter of minutes, with incredible intensity. Some areas report golf-ball size hailstones. This proves that extreme weather catastrophes happen with very little warning and there is just no telling as to how severe they will be.”

In South Africa, according to SAIA, insurers do recognise weather phenomenons such as tornadoes, which are prevalent in other parts of the world such as the United States.

“Buildings, contents of the buildings and vehicles are the most likely to be damaged by tornadoes and other adverse weather conditions. Therefore, it is important that they are covered by insurance. Insurers do recognise weather phenomenon such as tornadoes,” said Walls.

“Insurance cover for earthquakes and other natural disasters is available and is provided in the same way as cover for adverse weather conditions.

“It is always extremely important to ensure that the cover that you have been provided by your broker and/or insurance company is the cover you require.” –