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SA stunned by weather catastrophe in KZN

14 April 2022 Gareth Stokes

South Africa faces a bleak Easter weekend as the human and economic costs of floods, landslide and water erosion become clear following a natural catastrophe event in KwaZulu-Natal. Record rainfall in the province had claimed more than 259 lives at the time of writing, with the province’s emergency services, police and search and rescue teams hard-pressed to assist citizens and find missing persons. Sadly, as evidenced in news reports on eNCA and the South African Broadcasting Services, these searches are often ending in heartache.

Record rainfall on already-saturated ground

Heavy rainfall starting around 11 April 2022 and falling on already-saturated ground has caused extensive flood-related damage and loss of life along kilometres of KwaZulu-Natal coastline. The South African Weather Services recorded record rainfall in no fewer than eight weather stations in the area, with the 311mm measured in Margate more than doubling its previous 24-hour high, set 25-years ago. Three other weather stations topped 300mm over a single day. Rain continued to fall over much of the area through the 12th and 13th, hampering clean-up and rescue efforts and raising the possibility of further flooding. 

The extent of the damage to infrastructure and property is clear from aerial footage broadcast by eNCA. Flooding, mudslide and water erosion has destroyed hundreds of buildings, left thousands of cars under water, swept bridges and sections of road away and toppled shipping containers, to name a few. Almost immediately, Transnet issued a statement announcing that activities at its Durban port facilities would be halted due to forced closures of the M2 and N3… And minutes spent on social media provide images and video clips that leave one in total awe of the power of nature including flooded warehouses, submerged car parks and subsiding homes. 

Insurers swing into action, fast

The South African non-life insurance sector has already swung into action to bolster their claims handling capacity and offer assistance to policyholders and communities in the wake of this disaster, as it has always done. At this early stage the focus is on ensuring that individual insureds have a place to stay and that insurers have enough on-the-ground capacity to handle motor vehicle repairs and provide rental cars etc; but soon the focus will shift to calculating the economic and insured losses. The footage suggests economic losses will run into the billions, something government and the SA insurance industry can ill afford following 24-months of pandemic and the July 2021 riots, which largely played out in the same region. 

The few insurers we reached out to for comment have confirmed bolstering capacity in KwaZulu-Natal and issuing notices to their brokers on how to expedite claims and assist insureds, but were unable to assist with comprehensive comment by our deadline. We did, however, catch an interview given by Darryl Grater, Executive Head: Discovery Insure Distribution Services on eNCA. “First and foremost we at Discovery Insure are deeply saddened by the loss of life and resulting grief that has been felt by so many of those impacted in the region,” he said. “It is heart breaking to see so many people being in the need of a variety of critical services”. The insurer has already received a variety of claims that involve buildings, buildings contents, motor vehicles as well as commercial claims for business stock, goods in transit and some plant and machinery. 

Addendum / updates to a dynamic situation, made midday 14 April

The drama unfolding in KwaZulu-Natal is fluid, with the facts and figures being updated every minute. By midday 14 April, it was clear that the official death toll following the catastrophe will exceed 300 lives. In the hours since our newsletter went ‘live’ we received comment from Hollard and Santam, which we briefly include below. 

Arie De Ridder, Head of Claims at Hollard Insure said: “Words cannot describe the devastation caused and impact that this disaster will have on the residents of KZN. From media reports, [more than] 300 people have lost their lives, and our deepest condolences go to those who have lost loved ones. The people of KZN showed their resilience in recovering from the devastating July 2021 riots, and we know this time around it will be the same. Hollard will be there to support our clients and brokers in the best possible way to limit the impact on lives and livelihoods. This is what we, as insurers, do”. 

Fanus Coetzee, Head of Claims at Santam noted that the insurer was devastated by the disaster and the loss of life in KwaZulu-Natal. “We will ensure we do everything possible to assist our clients in their time of need,” he said. “Our sense is that the damage is extensive and severe, but it is too early to quantify the damage; our priority for now is to ensure that we authorise emergency repairs and support clients to make their homes safe and to get their businesses back up and running”. 

Insurers have extensive plans in place for disaster management. Santam indicated that they had “triggered their weather-related catastrophe claims management protocols that have been developed over the years from past experiences of such events.  “The catastrophe management protocols detail how the claims management process and rules will be adapted to ensure that we service our clients in the best possible way,” said Coetzee. “Our goal is always to create certainty with the clients as soon as possible after the event, and to ensure that we have our staff and suppliers at the location as soon as possible”. 

Hollard has declared and activated a comprehensive catastrophe management plan underpinned by six key pillars. “Some of the immediate steps taken include immediate authorisations up to R50000 for emergency repairs; mobilising our assessor and loss adjuster capabilities to KZN; agreeing mandates for claims processed through our regional networks; issuing communications regarding our general response to our brokers, suppliers and staff; measuring the financial impact closely; and keeping our re-insurers informed, among others”, said De Ridder. 

Both Hollard Insure and Santam indicated that it was too early  to quantify the number or value of claims likely to arise from the disaster. 

Insurance brokers are swinging into action too. Peter Olyott, CEO at Indwe, told us that the impact of this catastrophe exhibits in the destruction of infrastructure and loss of life and that the industry faces a huge bill for loss or damage to assets and subsequent business interruptions. “Many business were in the process of recovering or had just recovered from the effects of the July 2021 riots and so these floods could not have occurred at a worse point in time,” he said. The riots cost South Africa around R50 billion in economic losses, with R32 billion in claims paid by the country’s special risks insurer, Sasria SOC Limited. 

Could this be a R50 billion plus catastrophe?

“At this stage it is difficult to predict the total impact, but I  would hazard a calculated guess that the economic losses here collectively will match or exceed the losses caused in the July riots, given that in addition to widescale  infrastructure destruction and losses to business insureds we have thousands of personal insurance clients being affected, not to mention a very large sector of uninsured individuals; this is disaster management like we have not experienced in South Africa,” said Olyott. 

Indwe has already deployed teams and loss adjusters to the area. And the broker’s drone partners are also playing a part, being able to conduct aerial assessments of sites that are inaccessible due to damaged infrastructure. “We have also made know that our partners are available to assist any other providers or brokers who wish to make use of their services; our primary focus, aside from loss management, is in assisting our clients as far as is reasonably possible to plan on how to get back into business as soon as practically possible,” he said. One of the constraints that insurers and insurance brokers will face in this regard is the time that will be required to repair and reinstate infrastructure, much of which may be uninsured. 

Lack of resources could slow reinstatement

Discovery Insure told eNCA that it had deployed additional claims assessors to the area and was already at work assessing building and content damage in order to expedite claims. “We have arranged emergency accommodation for clients whose homes have been impacted and where homes are uninhabitable,” he said. “We have been able to source alternative storage yards [for damaged motor vehicles] and ring-fence an extra fleet of rental cars that are in process of being transported to KwaZulu-Natal for our clients”. His comments highlighted some of the challenges facing insurers in responding to catastrophes of this nature, with much of the infrastructure and resource required to meet insurers’ obligations to policyholders destroyed or in short supply. 

Grater also took a moment to reflect on the economic and social need for insurance given the rising frequency and severity of natural catastrophes. “As a result of global warming and associated climate change [weather experts] are warning that all forms of extreme and heavy weather, including heavy rain, post-storm surges and the likes will become more frequent,” he concluded. “The need for insurance is becoming more and more visible and evident”. The good news is that South Africa has a broad and competent insurance sector that can service businesses and individuals in many segments, and has continued to do so despite numerous shocks in recent years. 

“As horrific as these events are, this is where our professional advice, service and product solutions and insurance partners are put to the ultimate test,” concluded Olyott. “We remain available to our clients and partners during this time to do what we can to proactively manage this situation”. 

Writer’s thoughts:
What does one say in the wake of more than 260 deaths and this Armageddon-level destruction? Firstly, our heartfelt condolences to those who have lost loved ones through this catastrophe. To those who have lost business and homes, be strong, we can and will rebuild. And finally, our thanks and best wishes to the thousands of South Africans who are responding to this catastrophe. Strength to you and your families in these difficult times. Please add your thoughts or best wishes below.

 

 

 

Comments

Added by Gareth, 23 Apr 2022
Interesting point @Dirk. It is quite interesting how much more damage these 1-in-50 year events cause nowadays, due to urban creep and conscious / informed decisions to develop below the 50 year flood lines... Agree that infrastructure maintenance is a contributory factor; but as Toyota learned - even the best risk mitigation efforts (aka flood defences) can be rendered useless by the power of nature!
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Added by Dirk Uys, 17 Apr 2022
Not an act of God. According to one News24 report, something like a 1: 50 year event - obviously provisional assessment. It may be an illustration of the dangers of incompetent government at all levels, in my opinion. Maintenance of stormwater systems not done, informal housing below the 1:50 year floodline, etc.
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Added by John Bezuidenhout, 14 Apr 2022
OR is it an act of GOD for the attrocities forced by srupelous politicians in KZN ( much more than elsewhere )
Just asking - the BIBLE teach us that.
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