Pay riot-related claimants 30% upfront, public loss adjuster advises Sasria

Public loss adjuster Insurance Claims Africa (ICA) is recommending to state-owned insurer SA Special Risk Insurance Association (Sasria) that it urgently pay riot-related claimants 30% of their insured sum upfront.

ICA said this would assist cash-strapped businesses to get back on their feet as quickly as possible, and prevent looming retrenchments.

ICA is acting for a number of claimants who constitute the largest volume of claims submitted to Sasria after the recent riots in KwaZulu-Natal and Gauteng.

Mike Gaines, chairperson of ICA, said claimants were living in limbo, they were desperate for cash to pay staff, restart their businesses, replenish stock and repair damaged premises.

“We know from our experience with the Covid-19 business interruption claims that these interim payments made by insurers were a lifesaver for many businesses while they waited for the complex and lengthy claims settlement business to proceed.

“It’s going to be the same for these riot-related claims,” Gaines said.

He said Sasria has approached the National Treasury to assist with a shortfall in capital needed to meet the estimated R20bn to R25bn in claims expected, and this too will take some time to resolve.

“Sasria is a good, well-managed business in whom we have great trust, but they have never had to deal with claims on this scale and complexity before,” he said.

Gaines said paying 30% of the insured sum as an interim payment would be a safe option for Sasria and would not leave it exposed or jeopardise the company’s long-term sustainability.

“Sasria has authorised insurers to pay claims up to R1m, and some of these claims are being paid out. But it’s not enough, it’s not quick enough and it’s prejudicing the larger claimants, many of whom run massive retail, manufacturing and food production businesses which urgently need substantial injections of cash.

“In fact, we are concerned that without larger, urgent interim payments, it may have an impact on food security in the country, and will certainly impact our fragile economy negatively.”

Gaines said they warned clients from the outset that the claims process was going to take time and that they should manage their cash flow carefully.

“But, this is only possible for a limited time and even the larger businesses are now struggling. We have offered assistance to Sasria and are keen to be part of the solution in any way we can. The settlement of claims is going to take time, so interim payments are going to be critical.”

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