The South African Special Risk Insurance Association (SASRIA) says it can not afford to cover the country’s businesses if it sees a repeat of the July 2021 riots in the coming years.
Sasria is a state-owned entity that provides coverage for riots and other damage caused by civil violence. In a presentation to the National Council of Provinces on Tuesday (April 26), the group said that the riots in KwaZulu-Natal and parts of Gauteng saw it pay out more than R37 billion in damage claims.
It added that there was no global reinsurance capacity to cover another R37 billion loss event and that early warning signals point to another loss if interventions are not urgently set.
Sasria added that large retail groups such as Shoprite, Pick n Pay and the Foschini Group could disinvest from the South African economy if this coverage is not provided. Sasria currently limits all of its clients – including these large retailers – to a maximum coverage of R500 million, which is ‘clearly not enough’.
The group noted that London insurer Lloyd’s had increased its premiums by as much as ten times in the past year, as it believes that similar riots could occur in the country again in the future.
South Africa has seen its worst riots since the end of apartheid in July 2021, with violence claiming 354 lives. The perceived lack of response from the government led to a cabinet reform and the dismissal of the National Police Commissioner. The government also plans to enroll 12,000 police officers by the end of this year as part of efforts to rebuild its police force.
President Cyril Ramaphosa claimed that it was very clear that the last week of unrest and looting had been fueled and was part of an uprising attempt to overthrow the current government.
“We must acknowledge that we were ill-prepared for an orchestrated campaign of public violence, destruction and sabotage of this nature,” the president said at the time.
“While we commend the brave actions of our security forces on the ground, we must admit that we did not have the capabilities and plans because this happened to respond quickly and decisively.”
Insurer warns that South Africa could see recurrence of July riots
Source link Insurer warns that South Africa could see recurrence of July riots