Climate Change, Insurance and Financial Inclusion

22 April 2022 Nthando Kubheka - Sugar Insure
Nthando Kubheka - Sugar Insure

Nthando Kubheka - Sugar Insure

For Ntando Kubheka, watching the harrowing scenes unfolding in KZN as the province is battered by a weather catastrophe has been déjà vu all over again. In the latest flooding disaster during April 2022, over 450 lives have been lost and thousands of homes have been completely destroyed in KZN.

It brings flashbacks to 1987 when Ntando, as a very young child, was left stranded with his family after a devastating flood swept their home and everything in it away. Their home, by all descriptions a shack, and all their possessions, had been completely destroyed. The impact of the flood was far reaching and devastating not only for Ntando’s family, but throughout his community. 

“The reality is that the majority of homes and possessions lost in these floods are not insured. They are shacks, township and rural homes which for the most part are uninsurable in traditional insurance markets because they are deemed to be built outside of acceptable building standards. It is this financial exclusion and my own personal experience as a child that led me to develop Sugar Insure, a short-term insurance solution that provides South Africa’s most vulnerable citizenry with an affordable, practical means to insure their informal homes and contents from the consequences of theft, fire, civil commotion, public disorder, strikes, riots and terrorism as well as weather catastrophes - regardless of how these homes are built or where they are located,” says Ntando Kubheka, founder of Sugar Insure, a product of GENRIC Insurance Company Limited.  

“As a young man, I was confronted with the reality that the "formal" housing system only recognises suburban homes as deserving of insurance cover and excludes millions of homes located in the townships, rural villages and informal settlements. The question that plagued me as I grew to understand the workings of insurance better, was why could these homes not be covered?” explains Ntando.

In his research, Ntando got to understand the many issues that were magnified through the lens in which traditional insurance players assessed this market. It was the inability of traditional financial markets to meet the most profoundly unaddressed basic human need for financial security in the face of catastrophe that would steer Ntando to create the  Sugar Insure product towards the end of 2019.

The traditional insurance industry has avoided this market, and continues to do so, because typically these homes are not built by an NHBRC-approved builder, do not have municipal certificates of occupation or even a formal address and for these reasons, are deemed to be informal and illegal structures. However, they are no less important and valuable to the people living in them. 

“Sugar was developed to bridge this glaring fault line in the financial exclusion of millions of families who are left without any form of financial protection against losses caused by theft, malicious damage to property, fire, flood, climate change and other acts of God.  The effects of this exclusion of ‘informal’ housing from insurance protection is economic insecurity, tremendous hardship as a result of not being able to recover from uninsured perils and ultimately, it further perpetuates the deep social and economic injustices that lock millions of South Africans out of our economy. Consider for one moment what it means to have your home and all your possessions gutted and lost and then having to rebuild again, from nothing.  And then to have this cycle repeat itself maybe a year or two later,” he adds. 

The status quo keeps citizens dependent on an increasingly incapable State

Typically, after a major weather catastrophe on this scale, victims are registered with local government to receive food parcels and meals for a few days and a small grant from provincial social services.  They may even receive a shack rebuilding kit which is very basic, after that, the victims are left to try and rebuild their lives, salvaging whatever is left to put together their new home.  Government’s contribution makes up in a very small way for the lack of formal insurance as the grant and rebuilding kit are barely enough to cover even a small proportion of the true extent of their loss. 

“The reality is that we know of people who are still waiting for Government support to rebuild their lives and homes after they lost everything in the flash floods that hit parts of KZN, Eastern Cape and Gauteng in November 2020.  I don’t think we need to delve further into the other critical issues of the looting of state coffers and the mistrust of government by citizens that flows from that. Fundamentally, the Sugar Insure product is about empowering our people to take control of their outcomes and reducing their reliance on an increasingly incapable State in times of crisis. 

“Sugar Insure recognises the tremendous economic, social and cultural value of these informal homes for their owners and families living in them, and the need for insurance and financial protection.  A loss of your home due to a catastrophe – regardless of address - brings untold hardship, suffering and financial devastation to those affected.  The Sugar Insure product was born out of the unacceptable fact that the people who need it most are excluded from protecting their homes, families and security from unavoidable risks, including the growing risks posed by climate change and failing municipal infrastructure. Fundamental to Sugar Insure is our understanding of Africa’s context where homes may be 'non-compliant' to the formal system - but no less important and invaluable to the people living in them,” adds Ntando. 

How it works:

The Sugar Insure product provides cover for theft of contents, fire damage, and weather risks and has a very clear appreciation and understanding of the investment value that sits in the villages and townships that the majority of South Africans call home.  The cover includes:

  • Level Up for shacks – Insure your shack for a claim value of R6000, R10 000, R15 000 or R25 000 with a once-off voucher purchase which provides cover for an entire year – with a once-off annual premium starting from as little as R170 per year.  The cover amount depends on how much you would need to replace the structure of your home and all your belongings. Cover is provided for fire, weather risks, earthquakes and sudden impact.
  • Legacy for township and rural village homes – Legacy provides cover for a minimum property replacement value of R50,000 up to a maximum of R2 million for homes anywhere in South Africa. Cover is provided for fire, weather risks, civil commotion, public disorder, strikes, riots and terrorism, earthquakes, sudden impact, water and oil leaks and overflow, malicious damage, theft, accidental damage and breakage, and third- party liability. 

“Whilst the philosophy of ubuntu is as strong as ever in our communities when facing disasters, the financial relief and dignity provided by the Sugar Insure product is crucial to providing the materials to rebuild homes, lives and legacies after living through and triumphing over a disaster,” concludes Ntando.


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