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Sasria presents powerful figures showing a state-owned success

08 October 2019 Sasria

State-owned short-term insurer Sasria SOC Ltd (Sasria) has once again presented Parliament with a welcome set of clean and sustainable figures as detailed below:

• Gross written insurance premium up by 8.8% to R2,1 billion
• Net Insurance claims up by 138.1% to R1.5bn
• Combined loss ratio up by 73% to 114.7%
• Net loss of R73 million before tax
• Total assets under management up by 5.7% to R8,4 billion
• SAM Solvency ratio of 270%

Gross written insurance premium reached R2.1 billion for financial 2019, up by 8.8% from R1.9 billion the previous year. This growth is at the back of a slow economic growth, Sasria has grown its revenue by 8.8% against CPI.

A record amount of claims received totaling over R1.5 billion for the year ending 31 March 2019, up from R662million in the financial year 2018. Service delivery protests were almost entirely responsible, accounting for 80% of claims, while labour strikes accounted for the balance.
In the past five years, Sasria received over 16 000 claims valued at over R4.6 billion.

The balance sheet remains strong, with total assets worth R8.4 billion, up 5.7% from a year ago, ensuring the ability to honour current and future claim obligations. Sasria currently holds 2.7 times the amount of capital that the Prudential Authority requires Sasria to hold.

Sasria has once again earned a clean audit for its operations and activities for seven years running.
The figures were presented to Parliament in Sasria’s Integrated Report for 2019, and Minister of Finance Tito Mboweni praised the company for achieving a solid performance in a year of challenging conditions.

Sasria had delivered on its five-year strategy to serve as a mature, professional and financially sustainable organisation, said Managing Director, Mr Cedric Masondo. “We are committed to stretching our strategic goals to deliver on the transformation mandate, while continuing to provide cover against special risks.”

Sasria was created in response to riots and civil unrest during apartheid, when insurance companies balked at paying compensation to ordinary businesses damaged by the protesting public. Now as Sasria marks its 40th anniversary, recent protests have shown that this special risk insurance cover remains as necessary as ever.

The organisation plays a vital role in supporting the stability of the economy by being the only short-term insurer providing affordable cover against such risks of civil commotion, public disorder, strikes, riots and terrorism to any individual, business, government or corporate entity with assets in South Africa. By covering some losses and damages after disruptive events, Sasria helps its customers to restore their businesses, contributing to economic and social stability and protecting the economy from further job losses.
Future plans include developing alternative products and distribution channels to protect businesses that are not yet insured.

Sasria also supports the country through social responsibility initiatives, investing a total of R117.7 million over the past five years. In 2019, R26.7 million went into various initiatives, including building classrooms, libraries, computer labs and ablution facilities in school. Sasria’s bursary scheme has changed the lives of many underprivileged students by funding their tertiary education. That also created a talent pipeline for the financial services industry by focusing on students studying subjects related to insurance, risk and ICT.

Sasria’s success is applauded by Mboweni in his comments on the Integrated Report. “Sasria achieved financial sustainability with its assets and is able to withstand very high demands in terms of the special risks it covers,” he writes. “Despite record claims, Sasria has consistently delivered strong financial results compared to the insurance industry over the years.

It has not burdened the fiscus and has instead made a valuable contribution through its socio-economic development initiatives, taxes and dividends paid to the shareholder.”
Minister Mboweni believes Sasria can help the government to achieve the goals of the National Development Plan (NDP) by:
• Protecting the assets of everyone in South Africa in the case of strikes, riots, civil commotion, public disorder and terrorism:
• Contributing to financial inclusivity by ensuring its products remain relevant and offer protection to more people in South Africa; and
• Advocating the advancement of continued learning in the financial sector.

Mboweni fully supports Sasria’s ongoing mission to develop new products and grow its customer base to become more inclusive to more communities, including small, medium and micro-enterprises.

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QUESTION

In terms of vicarious liability, damages should not be borne by companies in all conditions, but only in those circumstances which it is reasonable for them to do so. Do you agree?

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