COVID-19: SA insurer provides to settle with as much as 700 small companies

COVID-19: SA insurer provides to settle with as much as 700 small companies

JOHANNESBURG – South Africa’s fourth-largest non-life insurance provider Guardrisk has actually decided to settle with up to 700 small company customers who are combating its decision to reject their claims associated with the impact of a coronavirus lockdown, the company told Reuters.

The country’s insurance companies, in line with the industry worldwide, have declined to pay out under organisation disturbance policies that many firms believed would give them cover since they argue lockdowns were not included in the policies.

In a contract with the regulator, some insurance companies have provided interim relief payments to impacted clients, much of which risk collapse as a result, to keep them afloat while lawsuit on the matter play out.

However Guardrisk, which revealed its strategies today, is the first to choose to settle the claims instead, a method preferred by those representing little firms as it prevents a potentially drawn out and costly legal process.

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The insurance provider estimated that 400 to 700 customers would benefit, with claims differing from tens of thousands of rand to a number of millions, it told Reuters on Wednesday in a written response to questions.

” We do expect that gross claims will go to several hundreds of millions of rands and the ultimate impact thereof will depend on numerous reinsurance structures,” it stated, including that the last quantity was likely to surpass gross yearly premium income for the section of clients by some margin.

Guardrisk had actually said in its statement today it would settle in spite of still holding the view that the lockdown itself did not trigger a claim under its policies. It had not stated at the time the number of firms would benefit.

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The settlement will be equal to the first three months of lockdown, minus appropriate savings and other relief payments received, it stated, without any limit on the maximum payable.

The insurer said it would still appeal a recent high court judgment that found in favour of among its clients.

South Africa’s biggest non-life insurance company Santam and others have actually provided interim relief to clients rather than settle claims. Old Mutual, another major insurance provider, has yet to set out either a relief or a settlement offer.

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