Johannesburg – Santam, South Africa’s biggest short-term insurer, said yesterday that it had already paid R950-million in relief payments to support small and medium-sized commercial policy holders and businesses distressed as a result of Covid-19.
The insurer said it made a provision of R1.3-billion in the six months to end June by estimating the exposure relating to policies with contingent business interruption (CBI) extensions, despite significant uncertainty regarding the size of these claims.
According to Chief executive Lize Lambrechts, an amount of R950-million of the R1-billion allocated in July had already been paid by yesterday to more than 2400 small and medium-sized businesses.
“Our decision to come through for the small to medium-sized businesses was informed by the fact that they have little reserves to count on when something like Covid-19 happens and most of them are new businesses and don’t have the ability to go to the banks to raise some funding to keep them going,” she said.
However, the company is facing a legal battle after hospitality group Ma-Afrika Hotels took the insurer to court regarding the CBI cover. The Western Cape High Court has reserved judgement on the matter for at least a month.
Santam’s share price closed 0.81% higher at R250.01 on the JSE yesterday.
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