Africa-Press – Namibia. SANTAM Namibia was one of the few insurers that responded to valid Covid-19 business interruption claims early on during the Covid-19 pandemic, by paying out substantial interim amounts to policyholders while waiting for legal certainty on business interruption insurance cover.
That certainty came in October 2021, when South Africa’s Supreme Court of Appeal rejected Santam South Africa’s request to pay for a shorter timeframe on their claims and ruled that Santam is liable to cover the impact of Covid-19 restrictions on hotel group Ma-Africa for 18 months. As a result, Santam South Africa proceeded to finalise all impacted Covid-19 business interruption claims.
Journalist Linda de Jager (LDJ) spoke to Santam Namibia chief executive officer Franco Feris (FF) about the company’s approach to business interruption claims in the wake of the Covid-19 pandemic.
LDJ: What is the status of Santam Namibia’s payout of Covid-19 business interruption claims?
FF: During July and August 2020, Santam Namibia paid N$20,4 million in urgent relief funding to 120 clients in the hospitality, leisure and non-essential retail services industries who had contagious or infectious notifiable disease or contingent business interruption (CBI) cover with the company. Relief payments were made to policyholders, who had incurred losses during the Covid-19 pandemic period and had CBI extensions in their policies. The aim of the relief payments was to support policyholders who were in financial distress. The relief payments were set at a minimum of N$25 000 and maximum of N$1,5 million for individual CBI policyholders.
An additional N$33,2 million was paid to 46 policyholders for valid CBI claims. From July 2020 to May 2022, Santam Namibia has paid N$53,7 million in CBI claims. CBI claimants had a final deadline date of 31 August 2021 to submit their claims information to Santam. The process is currently in its run-off phase with final assessments being done by external loss adjustors. We are committed to treating our customers fairly and finalising the CBI claims as soon as possible.
LDJ: Did Santam Namibia consider the landmark United Kingdom and South African judgements in the payout of claims?
FF: Santam Namibia has given full consideration to binding Namibian law as well as the reasoning adopted by foreign courts in dealing with the novel issues arising from Covid-19 business interruption claims. The recent judgements in South Africa and the UK are not binding in Namibia, but the reasoning contained in these judgements has been carefully considered, as it may be of persuasive value to Namibian courts.
LDJ: What constitutes a valid business interruption claim?
FF: Every business interruption claim is considered based on the terms of the policy to assess whether it is a valid claim. In general, clients who successfully claimed for business interruption losses in relation to the Covid-19 pandemic and the lockdown in Namibia were required to have the CBI extension in their policies prior to 18 March 2020, with such policy still in force at the date of the loss and their claims were required to fall within the scope of the wording of the CBI extension.
LDJ: Given the delays in payments, will a claim still be considered if a policyholder was paid up until after the specified indemnity period, regardless whether an entity managed to pay premiums later due to Covid-19 cashflow problems?
FF: A policyholder whose premiums were fully paid for the applicable policy period at the date of the loss will not have their claim prejudiced by a failure to pay premiums for a future policy period. It is important to note that every claim is assessed on its own circumstances.
LDJ: Most insurers withdrew cover for infectious and contagious diseases mid-term. Some policyholders say this is similar to having health insurance and while you are in critical condition in ICU, your cover is withdrawn at a time when you need help most. What is Santam Namibia’s take on this?
FF: Although Santam sympathises with the many businesses that have suffered during the pandemic, Santam Namibia does not agree with that sentiment. The endorsement of insurance policies to exclude losses arising from infectious or contagious diseases was effected throughout the global insurance and reinsurance industry and was unavoidable.
LDJ: Does this mean policyholders cannot get cover for future pandemics?
FF: Obtaining business interruption cover from private insurers for future pandemics will be very difficult as most, if not all, private insurers and reinsurers will not be willing to take on such risks under normal insurance policies. Other countries are exploring government-backed insurance programmes as a means to cover pandemic risks.
LDJ: Some say claims were not paid out fast enough to save businesses (that had BI cover) from ruin in Namibia.
FF: Santam Namibia helped the Namibian economy with relief payments to the value of N$20,4 million during July and August 2020 and further CBI claims payments of N$33,2 million. The prolonged Covid-19 pandemic has adversely affected businesses in Namibia and across the world. We continue to provide and are committed to support our policyholders as they navigate a world recovering from the pandemic.
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