SAIA and its members to assist flood victims

South African Insurance Association and its members to do everything in their power to assist flood victims

"The South African Insurance Association (SAIA) and its members will do everything in its power to assist victims of the recent Eastern and Southern Cape floods," said SAIA Chief Executive Barry Scott in Johannesburg today. Several SAIA members have already introduced special measures to deal with this crises situation, he added. Many insurers have sent special teams of assessors and other key personnel to the affected areas to assist in the handling of claims and other matters. Some of our members have also contributed in other ways to assist people, insured and uninsured, in dealing with their immediate needs.

The SAIA can ensure all policyholders that if they are insured for losses due to floods and other relevant events, their claims will be honoured. However, although it is the priority of SAIA members to process these claims as soon as possible, several factors might impact on this. Flood damage can usually only be properly assessed after excess water has dried up, damage might only become apparent after the removal of debris, more damage due to the aftermath of floods could be found later, and assessors, suppliers, and materials might find it difficult to get to the affected areas in sufficient numbers and volumes due to damage to infrastructure such as roads, bridges etc.

SAIA members are currently reporting that most claims received so far relate to personal lines cover, including homeowners and household contents insurance. More of these claims are expected as it is possible that because of structural damage some people might still be unable to submit their claims. Others, such as owners of holiday homes, also cant reach their properties to assess damage as many areas are still inaccessible.

It is reported that a smaller number of motor and commercial claims have been received. It is expected, however, that especially commercial claims will be submitted increasingly as infrastructural damage is repaired and personal losses had been addressed.

"The damage has huge proportions, and the claims are many and huge. It seems highly likely that this event will be deemed a catastrophe in terms of insurance and that reinsurance will come into play. This would mean that the direct impact on insurers in terms of payment of claims would be limited. Policyholders should rest assured that the insurance industry as a whole will be able to deal with this crisis financially and that it will remain stable," said Scott.

He added that although the calculation of premiums is not normally affected by one event only, the fact that there has been an increased level of claims this year, both weather and crime related, might result in higher premiums in future.