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South Africa has been, for the past six weeks, grappling a delicate balancing act between preserving human lives and saving its economy amid the latest global pandemic which our State President, Cyril Ramaphosa, has termed “an invisible enemy”. As the global village continues to battle the Corona Virus, which is causing numerous socio-economic challenges, South Africa is also fighting to remain afloat, with a national lockdown that commenced on 26 March 2020 in a bid to curb the rate of infections.
Our economy experienced an unprecedented immediate shutdown, which has heavily impaired various industries, leaving a gaping hole in our GDP. The non-life insurance industry has not been spared. Our members have, like all other industries, suffered losses of income over the last six weeks or so. However, this has not deterred our industry and our members from making contributions aimed at assisting the Government to alleviate the impact of the COVID-19 crisis on policyholders and SMMEs among many others. To date, the non-life insurance industry has contributed over R1bn by providing relief through premium reductions, premium deferrals as well as direct support to insurance industry business partners and government initiatives.
Our industry partners, the Financial Intermediaries Association (FIA), with whom we always seek alignment to deliver on industry initiatives have continued to play a critical role in the support of policyholders and the reduction of confusion in the marketplace. Over the last six weeks, we have had regular constructive engagements whose outcomes have ultimately been for the benefit of policyholders. We have also been in similar communication with the South African Underwriting Managers Association (SAUMA).
The industry, through SAIA, has continued to engage the National Treasury, the Financial Sector Conduct Authority and the Prudential Authority in a bid to find solutions that could be of assistance to alleviating the pressure on policyholders, SMMEs and other service providers in the financial sector supply chain. Our engagements have been fruitful, with the SAIA Board coming up with several initiatives aimed at supporting the Government decision to go on full lockdown in order to curb the spread of the COVID-19 pandemic. Weekly meetings between SAIA, NT, the PA and FSCA are ongoing to jointly address relevant issues as they arise. The SAIA Board EXCO members, as well as other SAIA Board members ensuring fair representation of all our membership categories, have been participating in the meetings.
In order to continue with our full participation in contributing towards the alleviation of the impact of the COVID-19 pandemic, SAIA believes that the non-life insurance industry should also be granted a block exemption from the Competition Act, similar to that granted to the banks. This will assist in enabling the industry to work together in a bid to find solutions in support of the nation’s efforts to curb the spread of the pandemic and ease the challenges faced by policyholders, SMMEs and the entire impacted financial sector supply chain, as well as the broader South African economy. An industry constituted Business Interruption Task Team has halted its work, for now, pending an application for exemption made to the Competition Commission.
Individual insurance companies have continued to assist policyholders who are negatively impacted financially by this pandemic and the resultant lockdown, on a case by case basis. The industry will also continue to communicate with its policyholders, educating and informing them of any industry developments that may likely affect them now and in the foreseeable future.
Our members would have noticed various communications from SAIA, which is necessary in SAIA’s bid to keep its members informed of all relevant issues. Whilst we are aware of the fact that the circulars coming out of our virtual office is unprecedented in number, we sent out a summary of all the circulars issued during April 2020 to assist members in making sure that they did not miss something relevant to them. We will continue with this practice for the foreseeable future.
We thank all our members for their contributions during these trying times and wish you all the best.
Viviene Pearson
SAIA Chief Executive
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