SAIA Bulletin - March 2022
The prevalence of underinsurance has become more evident over the last few years. This was amplified by the losses suffered due to fires and floods in KwaZulu Natal, but perhaps more particularly, the losses resulting from the Covid-19 pandemic, and the ensuing business interruption (BI) claims. These phenomena continue to expose the gulf between insurers and the policyholders’ understanding of the extent of their risk exposures.
In the last year, alongside the Covid-19 pandemic and working-from-home, a new risk – cybercrime - which has in a way been ignored for years, has shifted considerably to prominence. Too often, just one small mistake like compromised client login details or one employee forgetting to exercise caution with sensitive information can lead to an easy way in for criminals, and difficult consequences. South Africa has seen the risk of phishing attacks increase exponentially, leading to increased data breach incidences and compliance concerns. While TransUnion is just one local example, cyber-attacks remain a global challenge as data has become among the most valuable of commodities.
It has increasingly become imperative for organisations to employ deliberate strategies, platforms, and systems to ensure that their information and data does not land in the wrong hands. Such strategies, ideally embedded into organisational culture, comprise safe practice guidelines and should be an essential component of the organisation’s defence plan against third-party and other IT related risks. SAIA is glad that it remains a signatory and active participant with the Association for Savings and Investments South Africa, and in line with regulatory requirements, members of the Computer Security Incident Response Team (CSIRT). The platforms enable participating members to report cyber incidents and further promote cyber resilience in the management of incidents.
The increased frequency and severity of weather-related, large-scale damage in South Africa has demonstrated the importance of quantifying exposure and managing these risks. The interconnectedness of the insurance eco-system demonstrates that climate change in one area has a domino effect on other areas. An example of this being the erratic weather patterns which may lead to excessive rainfall causing floods, or inadequate rainfalls causing widespread drought. Either way, these result in damage to property and infrastructure or damage to the entire crop yields which impacts food security, and a monumental financial risk to the insurance industry and the economy. It therefore remains imperative that the insurance industry continue to engage the government to find sustainable solutions for the insurance gaps and how these can be covered.
The insurance sector has identified concerns with some aspects of the clauses contained in the EE Amendment Bill (B10B – 2020) and SAIA, with the support of the Board, has been working with the Association of Savings and Investments South Africa (ASISA) in preparing and presenting an industry view that highlights the challenges on the Bill. The process, which has taken some time, included a collaboration on the submission to the the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour of the National Council of Provinces (the committee). As an industry, we will continue to positively engage, and consult with all relevant parties in order to reach an amicable solution that can move South Africa forward in this front.
South African Insurance Association
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