SA’s Insurer Santam compensates customers with $60mln
(Ecofin Agency) - South African insurer Santam is pursuing its plan to compensate its customers. The initiative mainly concerns clients who have chosen the option, in their insurance policies, to protect themselves against business interruption due to a difficulty imposed by one of their suppliers, or the absence of clients.
A total of 1,315 customers, owners of tourist or catering businesses, had received 506 million rand as of August 13. The smallest payment made was 25,000 rand and the largest was 1.5 million rand. The compensated damages are those that occurred during the period from late March to early May 2020, during which South Africa was under strict lockdown.
The consequences of covid-19 have revealed new risks for businesses, beyond those usually experienced in disaster situations. The effects of the crisis on business activities, particularly in the tourism sector, are difficult to assess, as recovery is very slow.
The Santam initiative is therefore difficult to implement. Identifying and assessing the exact level of damage suffered is relatively complex and may take some time. The insurer has promised to finalize this compensation cycle as soon as possible. With this initiative, the South African company also wants to prevent a legal battle between insurers and their clients in South Africa, over the scope and nature of the covid-19 claim concerning the companies' activities.