South African insurer Santam appeals COVID-19 business interruption decision

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THE BHARAT EXPRESS NEWS INSURANCE NEWS
THE BHARAT EXPRESS NEWS INSURANCE NEWS

JOHANNESBURG – Santam will appeal on Friday against a court ruling that found South Africa’s largest non-life insurer to pay a client’s claim related to the coronavirus lockdown.

Like insurers around the world, Santam has battled with clients who say it was wrong to dismiss claims made under business interruption policies after coronavirus restrictions forced their businesses to shut down .

In South Africa, insurers say their policies did not cover national lockdowns. However, a court this week ruled that Santam was responsible for such a claim made by a hotel group, in a case closely watched by the industry.

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Santam said that after discussing the implications of the judgment with stakeholders, namely its major reinsurers, he decided that there was a need to obtain legal certainty on the matter from a higher court and that he should seek leave to appeal.

“Santam believes that the High Court erred in its judgment,” he said in a statement.

In a separate statement, he said that following the court ruling, which held Santam responsible for the full 18-month indemnity period, he increased his provision for claims under the relevant policy by 1 , 7 billion rand (111 million dollars).

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Santam said the outcome of the appeal created a high degree of uncertainty around his estimate of the claims, and that they could end up being significantly higher or lower, meaning it will take time to finalize the claim. financial impact.

It has already paid affected clients R 1 billion as interim relief, payments meant to calm them down while legal battles unfold. These will be deducted from any other payments made to customers.

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Santam shares were 2.56% lower at 11:16 a.m. GMT.

($ 1 = 15.3715 rand) (Reporting by Emma Rumney; editing by Jason Neely and Alexander Smith)

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