South African Insurer Santam to Pay Relief to Virus-Hit Firms
South African Insurer Santam to Pay Relief to Virus-Hit Firms
South Africa’s largest property and casualty insurer will pay as much as one billion rand ($60 million) in relief to clients with business-interruption cover hit financially by the coronavirus pandemic.
Santam Ltd. will begin making relief payments next week, mainly to small and medium-sized policyholders in the hospitality, leisure and non-essential retail services industries who claimed for losses as a result of restrictions to curb the pandemic, Chief Executive Officer Lize Lambrechts said in a statement on the company’s website on Sunday.
The total relief sum represents 70% of what policyholders in these industries are insured for over two months, according to the statement. Payments will be set at a minimum of 25,000 rand and a maximum of 1.5 million rand. Large firms will be excluded due to the “bespoke and complex nature” of their insurance policies, according to the insurer, a unit of Sanlam Ltd.
“After careful consideration of the situation, especially the unforeseen length of the lockdown and the ongoing restrictions that are impacting businesses, we decided to assist with a substantial payment commitment to help sustain our policyholders in the most impacted industries,” Lambrechts said.
South Africa’s government imposed a strict five-week lockdown on March 27 that allowed only essential services to operate. Insurers have rejected business-interruption claims resulting from the lockdown, saying payouts can only result from physical events such as an infection at a company’s premises. While some restrictions have been eased, a ban on alcohol sales and a night-time curfew remain in place.
Santam’s announcement comes after the Financial Sector Conduct Authority on Friday said insurers agreed to consider paying a one-time relief to customers as the industry awaits the outcome of several court cases to determine they should pay clients who were forced to close due to the lockdown.
©2020 Bloomberg L.P.