South African insurers are bowing to demands for the payment of losses that businesses suffered during the nation’s lockdown.
Momentum Metropolitan Holdings Ltd.’s Guardrisk will make settlement payments to policyholders who submitted business-interruption claims for losses suffered when all but essential services were allowed to operate. Santam Ltd. and closely-held Hollard Insurance Co Ltd. said they would offer one-time financial relief to clients hard hit by a five-week lockdown that started on March 27.
The FSCA and the Prudential Authority, which oversees the strength of the financial-services industry, last week struck a deal with insurers to consider once-off payments to help keep customers afloat, while courts decide whether insurers are correctly interpreting the terms of contracts. “We hope the legal process is pursued and fast-tracked,” said Ryan Woolley, chief executive officer of Insurance Claims Africa, which is representing over 600 businesses in the tourism and hospitality sectors. “We are going to be pushing to get some resolution.”
Santam, South Africa’s largest property and casualty insurer, and Hollard will extend relief to mainly small-and medium-sized businesses, with Santam committing to a collective 1 billion rand in payments.
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