Following the recent spate of natural disasters that hit Gauteng and KwaZulu-Natal, insurance expert, Nico Esterhuizen, explains how insurance companies usually respond to these matters.
According to Esterhuizen, the insurance companies are already seeing a number of claims coming out of Gauteng province and affected neighbouring provinces like Free State and Mpumalanga due to the recent storms.
It's too soon to gage the effects of the Durban floods and how it has affected the industry because the incident only occurred three days ago, says Esterhuizen.
He says most insurance companies take out what they call a reinsurance policy from international companies to relieve pressure in times like this.
Usually the local insurance companies will approach international markets to buy a reinsurance. These reinsurance are spread all over the world and share in the risk that the South African market is experiencing.— Nico Esterhuizen, Insurance Risks Manager at South African Insurance Association
The South African market tends to buy a number of this reinsurance to prevent these kind of things to harm their balance sheet too much.— Nico Esterhuizen, Insurance Risks Manager at South African Insurance Association
There is a high possibility that consumers might see an increase in premiums for insurance policies in the near future.
If a certain area has experienced more claims and there is high probability that it's gong to recur, you will probably see an increase on your policy...— Nico Esterhuizen, Insurance Risks Manager at South African Insurance Association
To hear how this could affect you, listen below: