Taxpayers paid R22-billion in insurance claims for the July unrest   

The 2021 July unrest did not only come at a heavy price for businesses and those who lost lives, taxpayers also had to fork out R22 billion to settle insurance pay-outs; money that could have been spent on much-needed services.

This is about five times the R3.9 billion the National Treasury said, in October, would be disbursed to the South African Special Risk Insurance Association (SASRIA) to cover claims for the riots in KwaZulu-Natal and Gauteng.

SASRIA has so far paid over R24 billion, 80% of all lodged claims have been paid out, with 6 800 claims totaling R7 billion still outstanding.

“Like most South Africans, [SASRIA] was largely affected by the riots as there has been an unprecedented number of claims, most of which have been assessed and settled. We are thankful to the support government, particularly the Treasury, has given us,” chief executive officer, Mpumi Tyikwe said.

He, however, lamented that it was unfortunate that Treasury had to inject billions of taxpayers’ money to assist with settling claims “as this was money that could have been better used towards other urgent service delivery needs”

SASRIA is the only non-life insurer that provides special risk cover to all individuals and businesses that own assets in South Africa, as well as government entities.

It covers against risks such as civil commotion, public disorder, strikes, riots and terrorism. South Africa is one of the few countries in the world that provide this type of insurance.

The Durban Chamber of Commerce and Industry NPC has said that the cost of the July unrest, in which almost 354 died, so far amounted to over R70 billion and this figure could increase as survey on the cost of the unrest continued.

“This past year has not only been tough and challenging, but it called on us as an organisation to think differently and come with solutions geared towards smoothly assisting our stakeholders, and in the end, all our clients,” Tyikwe said.

In April SASRIA said despite the R22-billion injection it is still projected to suffer a loss of about R26 billion in the 2021/22 financial year, but the chief executive assured that they were in a stable financial position, with enough capital required by the regulator.

Based on this, he said, SASRIA could focus on risk planning as it future proofs the business to be agile and to be able to handle any event that can be similar to the unfortunate 2021 July unrest.

“It’s commendable how claims were dealt with. This support has been tremendous, and we are grateful to be part of an industry that pulls together when faced with such a huge challenge,” he added.