(Reuters) – South Africa's only insurance company covering political violence will increase its premiums to cover reinsurance costs after some of the worst unrest in decades, the head of state-owned company told Reuters.
More than 300 people died and about 3,000 shops were looted when protests and violence broke out in July, triggered by the imprisonment of former President Jacob Zuma but later driven by anger over poverty and inequality.
Sasria SOC Ltd., set up after private companies stopped guaranteeing the risk of political violence during apartheid, currently estimates claims related to the unrest at 18 billion South African rand ($ 1.19 billion), according to a presentation on Monday.
It relies in part on reinsurance contracts to pay, and the cost of those contracts is now increasing, CEO Cedric Masondo told Reuters by phone.
"We will increase the pace driven by the increase in reinsurance," he said, declining to say by how much. He said the timing of the increase had not been completed.
A circular announcing the decision to Sasria agents ̵
As Sasria is the only unit that offers insurance coverage for political risks, companies across the country can stand in line for higher premiums if they seek protection against losses linked to strikes or protests.
Mr. Masondo said Sasria still decided whether all customers would be affected.
The insurance company's standard coverage offered by agents runs up to a maximum of 500 million South African rand, while a further 1 billion rand is available for larger companies approaching Sasria directly. Catalog