Santam, South Africa’s largest short-term insurer, said yesterday that it had already paid R950million in relief payments to support small and medium-sized commercial policyholders and businesses distressed as a result of Covid-19.
Santam said it made a provision of R1.3billion 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.
Chief executive Lizé Lambrechts said an amount of R950m of the R1bn 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,” Lamprechts said.
However, Santam 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 judgment on the matter for at least a month.