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The clock is ticking…

27 July 2021 Gareth Stokes

Insureds who have Sasria SOC Limited cover in place must notify their insurer of their claim within 30 days of the loss event. This means the clock is already ticking on any loss or damage claims ensuing from the widespread looting and vandalism suffered in areas of Gauteng and KwaZulu-Natal between 9 and 19 July 2021. The best advice to affected businesses and individuals is to notify your insurer of the potential claim immediately you become aware of the loss and regardless of whether or not you have all the documentary evidence needed to support the claim.

Sasria cover is different

It will take months before South Africa has a clear picture of the damage caused by the recent civil commotion; but early estimates are for insured losses of between R12 and R15 billion, with the domestic economy estimated to take a R50 billion hit while shedding up to 150000 jobs. Those lucky enough to have insurance in place, with Sasria cover included on their policies, will be able to claim for their losses from South Africa’s state-owned special risks insurer, Sasria SOC Limited. But there are some subtle differences between how Sasria and traditional insurers operate. To find out more, FAnews attended an informative panel discussion hosted by the Graduate Institute for Financial Sciences (GIFS). 

The panel reiterated that Sasria would honour claims for damage and losses due to civil commotion in line with the insured’s Sasria coupons. This underlined text is important, because in order to claim for civil commotion losses you must be insured with a traditional insurer and your policy must include Sasria cover. Assuming you meet the two aforementioned criteria you should experience few difficulties in lodging a successful Sasria claim. Sasria MD, Cedric Masondo, has already dismissed media speculation that looting was not an insured Sasria peril. He is on record that civil commotion will trigger Sasria cover and that the special risks insurer is “well capitalised … and has adequate reinsurance programmes with A-rated reinsurers” to cover the catastrophe. 

Lodge your claim via the correct channels

That is great news for insureds; but how do you go about getting your claim to Sasria? We have heard of many panicked individuals trawling the web for details of how to lodge the claim with the special risks insurer. If you are among them, we can safely say you are doing two things wrong. First, you are knocking at the wrong door. All claims against Sasria covers must be directed to one of their agents, aka your insurer. And second, you should have purchased your insurance cover via an insurance broker. Those who buy insurance via a broker instead of going direct would have simply had to call their broker, who would have been 100% up-to-speed with the process for lodging Sasria claims. 

The panellists offered some useful insights into Sasria, including how the cover is ‘bought’ and how to ensure a smooth claims process, which we share over the following paragraphs. To begin, your cover is placed with Sasria by an insurer, who Sasria refers to as its agent. In other words, you ‘buy’ Sasria cover as an add-on to your regular insurance cover. In most cases, especially in the commercial insurance world, the purchase of this cover is facilitated by an insurance broker. Brokers who place their client’s ordinary risks on cover with an insurer will also request that the insurer issues the relevant Sasria coupons. The insurer collects the premium for both its cover and the Sasria coupon, and then pays over the premium for the coupon to Sasria. 

An easy way to avoid confusion

Zuriel Naiker, MD: Sales and Distribution, Africa at Marsh said that confusion over who you should turn to for help with Sasria claims can be cleared up by recalling how you placed your assets on cover to begin with. “If you purchased your insurance through a broker, then your broker is your first point of call; if you purchased cover directly from the insurer, then you will interact with their call centre or the other contact points they offer,” he said. In either case, your claim must be submitted to the insurer, who will then deal with it per its Sasria mandate. Small claims may be paid immediately, larger claims are sent through to Sasria for assessment. 

Following a catastrophe, brokers should be in constant communication with clients that are potentially affected. Peter Olyott, CEO of Indwe Risk and president of the Financial Intermediaries Association said that the first step following a looting or vandalism incident, whether you are insured or not, is to make an assessment of the damage. “You need to formulate the damage or loss to your assets, stock and impact on your trading income and begin collecting the documentation to prove and substantiate these losses,” he said. But you should not delay notifying your insurer of the loss. 

Claims must be registered within 30-days of the loss. “In terms of the time bar, we encourage insureds to immediately submit their claim to our agent company (the insurer) either directly or via their broker and register the claim with the information that you have at hand,” said Benjamin. Once the claim is registered, brokers can assist clients with collating and submitting the documentation necessary to support the claim. Those needing an extra ‘steer’ insofar what documentation is needed can refer to Sasria Communique 94, issued July 2021. 

Accurate and complete information

“It is essential that your clients submit accurate and complete information in support of their claims,” added Naiker. He also reminded the audience that the insurance process required them to report cases of looting and vandalism to their local SAPS office, which case number is required by the insurer. The panellists offered the following tips to help your clients ‘flesh out’ their claim folders and loss estimates: 

  • Use the last three years financial statements to determine average stock holdings for the loss date;
  • Refer to third party documents like bank or creditor statements to assist with valuation of stock-on-hand at date of loss;
  • Take photos of damage following the loss event, assuming it is safe to access the site and, where possible, include comparable pre-loss photos;
  • Keep newspaper clippings and other media coverage of damages in the area you operate from or reside in;
  • Retain copies of CCTV surveillance from your premises that coincide with the date of the loss event; and
  • If possible, obtain drone footage to show the extent of the damage to your business premises and surrounds. 

Fast-tracking of claims already underway

The sense we got from the panel discussion is that Sasria, assisted by its agents and brokers, will do everything in its power to fast-track civil commotion claims. They have taken steps to get low value claims, up to R50000, paid swiftly and are negotiating to give certain insurers an additional mandate to pay higher value claims, totalling R500000 for personal and R1 million for commercial insureds. But claims running into millions, bearing in mind that Sasria coupons can go to R500 million or more, will take longer to thrash out. 

“We are dealing with a loss event of a scale and nature that we have not witnessed before,” concluded Naiker. Even so, insureds can rest easy knowing that stakeholders from across the insurance ecosystem are committed to getting claims paid and businesses back on track. “Sasria will honour claims and make sure our clients are indemnified,” concluded Benjamin. “We recognise the support we receive form our agents and brokers and will work together as an industry to make sure this catastrophe is managed in the best way possible”. 

Writer’s thoughts:
Experience has taught that industry expectations of how challenges will be dealt with often differ from the on-the-ground reality. Our sense is that the sheer volume of claims following the July 2021 catastrophe could overwhelm insurers and result in costly delays. What are your thoughts? And have you or your clients had any issues in submitting Sasria claims to date? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts [email protected].

 

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