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Johannesburg’s severe hailstorm this week is the latest headache for the insurance industry that could cost it dearly as it sifts through the influx of claims following the freak event.
On Monday parts of Johannesburg, including Midrand, Braamfontein and Bryanston, were ravaged by an overnight hailstorm that caused severe damage to vehicles, businesses and homes.
Although insurers, in the aftermath of the storm, are still counting the costs of the extreme weather event, some have already reported a significant increase in claim volumes from policyholders affected by the incident.
Naked Insurance co-founder Ernest North told Moneyweb that so far, the number of claims received from policyholders affected by Monday’s thunderstorms shows signs of this event being the worst to hit the insurance provider in the last three years.
JSE-listed short-term insurers Santam and OUTsurance released statements on Tuesday acknowledging receiving claims calls or enquiries from policyholders following the catastrophic weather event.
OUTsurance, in an emailed response to Moneyweb’s questions, said it is too early to accurately quantify the impact of the storm on the business, but acknowledged higher claim volumes following the storm.
“Whilst the volume of calls and claims is high, we are well equipped to handle the influx of claims. A large percentage, more than 50% currently, of claims are being registered by our clients directly on the OUTsurance app,” OUTsurance said.
Weather risk increasing
The severe hailstorm in the country’s economic hub adds to other events that point to a growing risk of extreme weather-related incidents for the insurance industry.
Most insurers are still adding up the costs of the storms that hit coastal areas in mid-September, causing damage to cars and flooding homes, and before that, several other devasting climate-related events were recorded in the country.
Following the floods in the Eastern Cape in February, the provincial government estimated that it would cost about R4.5 billion to fix and repair damaged road and bridge infrastructure.
According to the KwaZulu-Natal provincial government, the devastating floods that occurred in 2022 caused an estimated R17 billion worth of damage.
All this illustrates the extent of the destruction that has come along with the greater incidence of weather-related catastrophes that have hit the country in recent years, ultimately upping the stakes for the insurance industry.
For more on this story visit Moneyweb.co.za
