{"id":58724,"date":"2023-12-30T15:55:31","date_gmt":"2023-12-30T15:55:31","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa"},"modified":"2023-12-30T16:05:11","modified_gmt":"2023-12-30T16:05:11","slug":"government-failures-raise-cost-of-insurance-in-south-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa","title":{"rendered":"Government failures raise cost of insurance in South Africa"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africa\u2019s insurance industry is grappling with a difficult and changing risk environment, with infrastructure deterioration, load-shedding, and crime increasing the number and value of claims, which makes it more expensive to insure goods.<\/p>\n

This is feedback from Santam\u2019s CEO, Tavaziva Madzinga, who outlined these changes in a piece titled South Africa\u2019s Shifting Risk Landscape.<\/p>\n

Madzinga warned that increasingly common catastrophic events, such as Covid, the July Riots, and Durban Floods, are exacerbated by the country\u2019s poor infrastructure, load-shedding, and crime.<\/p>\n

\u201cClimate change, infrastructure concerns and socio-economic challenges have created a tough environment for local insurers, who have a responsibility to ensure their business is strong and able to withstand the cost of the risks in the environment,\u201d Madzinga said.<\/p>\n

Locally, rioting and looting caused an estimated R50 billion in economic losses in July 2021, with the April 2022 KwaZulu-Natal flood losses estimated at R54 billion.<\/p>\n

The insurance industry carried half of that total. Climate change-related extreme weather events also dominated the insurance industry\u2019s claim statistics in 2022 and 2023.<\/p>\n

The growing number of large catastrophe reinsurance claims locally has caused reinsurance premiums to increase significantly. This will increase the cost of insuring goods in South Africa.<\/p>\n

Additionally, attritional weather losses \u2013 weather-related claims not associated with a catastrophic event \u2013 also threaten the sustainability of the insurance industry.<\/p>\n

According to the 2022\/2023 Santam Insurance Barometer Report, Santam experienced a spike in flood-related claims across all lines of business during 2022.<\/p>\n

The trend continued into the first half of 2023, as the April 2022 KwaZulu-Natal floods were followed by flooding along the Orange and Vaal Rivers and extensive flooding in the Western Cape around June.These events revealed an additional layer of risk in that South Africa\u2019s infrastructure degradation increases the extent and severity of flood-related losses.<\/p>\n

This is a major challenge that will have severe consequences for the insurance industry and the businesses and communities that rely on them.<\/p>\n

Worsening road conditions, fire-fighting capabilities, sewerage systems, and floodwater drainage \u2013 to name a few \u2013 are becoming increasingly vulnerable to disasters.<\/p>\n

Damages following disasters are extensive, the cost of repairs exorbitant and downtime is lengthy. Most importantly, infrastructure that is not structurally sound also impacts the number of lives lost in a disaster.<\/p>\n

\u201cTo ensure sustained insurability, significant focus and financial resources from the government are required to turn things around, as well as a collaborative effort by the private and public sectors,\u201d Madzinga said.<\/p>\n

\u201cFor the full 2022 financial year, we experienced an increase of approximately 67% in claims for damage to sensitive electronic items due to power surges across our personal insurance and commercial insurance portfolios, totalling R609 million.\u201d<\/p>\n

From a socio-economic perspective, the steady increase in crime has also become a systemic risk we are tracking closely.<\/p>\n

The 2022\/2023 Santam Insurance Barometer Report showed South Africa is seeing a significant shift in vehicle crime.<\/p>\n

Additionally, the report found that a growing number of industry stakeholders believe cybercrime to be the next potential black swan loss event for the insurance industry.<\/p>\n

Despite this, there seems to be an inertia in both risk mitigation and risk transfer efforts in this space.<\/p>\n

The current high-risk environment presents many challenges for insurers who must prioritise ensuring they can carry these risks sustainably.<\/p>\n

\u201cA thriving insurance sector is a critical cog in a healthy economy as insurance empowers individuals and businesses with the freedom to be more resilient,\u201d Madzinga noted.<\/p>\n

\u201cIt is therefore vital that we understand and respond to both traditional and emerging risks in an increasingly complex risk landscape.\u201d<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. South Africa\u2019s insurance industry is grappling with a difficult and changing risk environment, with infrastructure deterioration, load-shedding, and crime increasing the number and value of claims, which makes it more expensive to insure goods. This is feedback from Santam\u2019s CEO, Tavaziva Madzinga, who outlined these changes in a piece titled South Africa\u2019s […]<\/p>\n","protected":false},"author":84,"featured_media":58722,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7],"tags":[274,315,275],"class_list":["post-58724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nGovernment failures raise cost of insurance in South Africa - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa\u2019s insurance industry is grappling with a difficult and changing risk environment, with infrastructure deter ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Government failures raise cost of insurance in South Africa\" \/>\n<meta property=\"og:description\" content=\"South Africa\u2019s insurance industry is grappling with a difficult and changing risk environment, with infrastructure deter ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-30T15:55:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-30T16:05:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/12\/sm_1703939561.465682.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Government failures raise cost of insurance in South Africa\",\"datePublished\":\"2023-12-30T15:55:31+00:00\",\"dateModified\":\"2023-12-30T16:05:11+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa\"},\"wordCount\":602,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/12\/sm_1703939561.465682.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\",\"head lines\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/government-failures-raise-cost-of-insurance-in-south-africa\",\"name\":\"Government failures raise cost of insurance in South Africa - 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