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The true cost of #FeesMustFall

21 January 2016
Thokozile Ntshiqa, Executive Manager for Stakeholder Management at Sasria

Thokozile Ntshiqa, Executive Manager for Stakeholder Management at Sasria

Every person, or group of people, has a breaking point. Push them beyond that breaking point, and you must expect a reprisal. Eventually, a line will be drawn in the sand and there will be repercussions.

While no rational person can condone what happened during the #FeesMustFall campaign, we had to live with a group of disenchanted students who felt that they had enough with government’s empty promises. The unfortunate violence that occurred in its wake has cost the insurance industry an estimated R22 million says the state owned insurer Sasria.

Shocking figures

Sasria added that it has received nearly 100 claims to the value of over R22 million resulting from the #FeesMustFall campaign.

More than half of the claims received (57%) exceeded R20 000 in value, with 12% being more than R350 000. Most claims were related to business interruption, fires on commercial premises, damage to equipment and damage to vehicles.

Some of these claims have already been settled, but many are still being assessed and processed. This means that the R22 million is a projected figure and will most likely escalate within the coming days. By how much depends on the nature of the claims.

Mind the gap

We have seen this before with social revolutions. When the public feels that government is no longer serving their needs, they will make their voices heard. The Egyptian revolution of 2011 is a perfect example of this.

And we are not watching these events through tainted lenses. We have our own challenges to deal with in terms of service delivery protests and social uprisings.

“South Africa has a high level of exposure to special events such as protests and strikes,” says Thokozile Ntshiqa, Executive Manager for Stakeholder Management at Sasria. “These can result in significant damage to both personal and commercial property, as well as either partial or full interruption of business operations.”

This, she says, is why it is so important for individuals and businesses alike to ensure that they avoid gaps in their insurance cover and include special risk insurance on all property, vehicle and valuables insurance policies.

Don’t tempt fate

While civil disobedience is an ever present risk in South Africa, it does not occur every day. Because of this, companies may not think that extending cover against these risks should be a top priority. While extending this cover is optional, Ntshiqa urges all brokers to make sure that clients are adequately covered for special risks. 

“Some of the claims we received from businesses in the wake of #FeesMustFall were well in excess of R500 000 in value. One claim for damages to university property amounted to R10 million. This further heightens the need for special risk insurance cover provided. Without Sasria cover these losses would have been disastrous to the companies involved.”

Check your blindspot

Complacency is a self-inflicted peril that can throw a spanner in the works. While companies may be small, one must never think that they are immune from the direct effects of public violence or the fallout from it.

“Too many people think that something like this will never happen to them,” says Ntshiqa, “but the facts tell a different story. Everyone is vulnerable to loss under these circumstances and everyone needs to be appropriately insured.”

She adds that another blind spot amongst businesses, she finds, is a poor understanding of how extensive losses can be when business operations are interrupted.

In some cases, this is a short-term interruption related to the fact that the business cannot continue to operate when it finds itself in geographical proximity to a protest or strike. In other cases, business shut-downs can be absolute and lengthy, such as when commercial premises are burnt down. Businesses of all sizes need to be insured against this eventuality.

“The thing to remember is that #FeesMustFall wasn’t an anomaly, as damages due to civil actions happen all the time. Brokers need to make sure that clients don’t become a victim twice - firstly through the original loss and secondly through lack of sufficient insurance cover.”

Editor’s Thoughts:
This is a stark reminder of the existence of Sasria and the importance of it. The cover is not one size fits all, so brokers play a vital role in assessing the right level of cover. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].

Comments

Added by Peter, 21 Jan 2016
I agree that Sasria is crucial. However it could be so much better if it were changed into a true reinsurer where all insurers were compelled by law to include Sasria type perils within the underlying policy. Then, when a "Sasria type claim" occurred this would be recoverable by the insurer from Sasria. The benefits are twofold: There would be no differences in cover between the underlying and Sasria policies (Which many clients are unaware of) and premiums would merely be collected annually as a % of the insurer's total premium income by class of business. This would avoid the huge administration load associated with the "Coupon system."
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Added by Eric, 21 Jan 2016
Add the R20m at UWC,

There is perhaps a time to protest but destruction of the very place where you are learning is stupid.
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