Acting Finance Minister Mondli Gungubele says the government has allocated US$1.5 billion to the South African Special Risk Insurance Association (SASRIA) to be used in settling damages from last year’s riots in KwaZulu-Natal and Gauteng provinces.
The July 2021 riots, which erupted following former president Jacob Zuma’s imprisonment for defying a court order, left over US$2.1 billion in damages after running battles between the security forces and the rioters.
Speaking during debate in Parliament on Tuesday, the minister said the US$1.5 billion was meant to assist the insurer in settling claims this financial year – and guaranteeing that the organisation had adequate capital to fulfil regulatory requirements.
“Beyond the financial responsibility, SASRIA will also revise premiums, evaluate reinsurance agreements, and explore opportunities to expand its customer base to bolster its ability to respond to risks,” Gungubele said.
He said since its establishment in 1979, SASRIA had never experienced an event on the scale of the July 2021 unrest, and has always been able to honour its financial obligations.
Public unrest, strikes, rioting and acts of terrorism are included in the risks covered by SASRIA’s short-term insurance, the minister said.
“The government has reaped dividends amounting to US$853 million from Sasria. However, in 2021 SASRIA faced its gravest challenge yet because of the July unrest which resulted in US$2.13 billion worth of claims,” he said.
He added: “This left SASRIA technically insolvent and unable to satisfy its financial commitments nor sustain its regulatory obligations such as a minimum solvency cover ratio of 100% mandated by the Prudential Authority.”
NM/jn/APA