IconAccounting & Tax
IconAppraisers & Valuers
IconArbitration Services
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompany Secretarial Services
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFire, Storm, Flood Damage Specialists
IconForensic Investigation Services
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOutbound Sales
IconOutsourcing Companies
IconPolicy Administration
IconPremium Financing
IconPublic Loss Adjustors
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
  Subscribe To »

The importance of insurance to SOE’s







By Mr. Langa Sigodi, Business Consultant: Public Sector
Lion of Africa Insurance

State-owned Enterprises (SOEs) play a critical role in the growth and development of South Africa. Running as separate entities that are partially or wholly owned by the state, they combine the efficiencies of private business whilst being driven by a government mandate. They are therefore uniquely placed to drive development and serve the interests of the South African public. Insurance for these SOEs therefore becomes not only a matter of protecting the enterprises themselves from large and unforeseen losses, but is then also an instrument to ensure that public interest remains served even in the face of losses. Losses in the insurance world are broadly defined as injury or damage to property suffered as a result of an insured event.

It is important to view SOEs against the backdrop of the political environment that South Africa has found itself in over the past decade. Increased political instability, increasing unemployment rates and the well documented state capture make the risk of damage to state owned assets due to theft, fraud and legal claims against SOEs higher than at any other time in democratic South Africa. These risks have a direct impact on the ability of SOEs to function effectively – in other words it affects service delivery. Insurance provides solutions to these risks, notwithstanding the obligation of the insured companies to exercise due care and to take reasonable precautions against such losses occurring.

But perhaps more worrying is the increased risk of catastrophic losses in South Africa. In a 2017 report titled “Weather, Risk and Catastrophe Insight” released by Aon plc, a global risk consultancy firm, we see that global losses due to catastrophes was 97% higher than the global average between 2000 and 2016. Particularly noteworthy for South Africa, is that the country is no longer considered a “low catastrophe risk region.” When one considers that insurance paid more than R5 billion following the Knysna fires and Durban floods of 2017, and that such catastrophic losses are predicted to be “the new normal,” our state owned enterprises have a duty to ensure that they are covered for such losses without a significant drain on already stretched state resources. In these 2 catastrophes it was mostly municipalities and personal lines individuals who were affected, but the increased likelihood of such catastrophes occurring means that SOEs are at increased risk of being affected and they need to plan accordingly.

There are, interestingly, a handful of insurers in South Africa who are placed, and indeed have the risk appetite, to insure public sector business. These institutions play a key role in ensuring that the effects of losses, including those that are non-financial, are minimized. Partnering with insurance brokers who are skilled in understanding public sector risks and insurance companies with the capacity and appetite to handle large losses should be one of the primary focuses of any SOE. SOEs simply cannot afford to neglect this important instrument to ensuring their ability to continue to serve the interests of the people of South Africa. 

Source: High Pitch Media
« Back to previous page Print this page » |

Breaking News »

The Implications Of Overloaded Vehicles On Your Insurance Policy

Overloading – it’s a common occurrence on our roads. If we don’t drive past an overloaded bus, taxi or truck, then we read about another horrific accident caused by one. Hundreds of passengers ...
Read More »


Supporting Brokers In Optimising The Claims Experience Of Their Clients.

TANSA is a team of dedicated professional Attorneys, Forensic accountants, Disaster Claims Experts and Insurance Specialists focused on Insurance Claims & Dispute Resolution. Their mission is to support ...
Read More »


Redefining the role of the broker in a digital age

Technology, data, cultural and behavioural change of the consumer is transforming the role of the broker – and the importance of advice – in South Africa’s intermediary insurance market. Soul ...
Read More »


Premium collections now available through Brolink

Brolink has entered the premium collection market. Says the company’s CEO, Howard John, “After a very successful pilot programme, and working through a number of legislative issues that ...
Read More »


More News »


Healthcare »


Investment »


Life »


Retirement »


From The Glossary »


Rand-cost Averaging:

Method of buying shares or unit trust units by investing the same amount of money regularly, regardless of the market price. Rand-cost averaging helps investors to avoid timing the market, as a Rand buys more units when the price is down and fewer when the price is up.
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2021. All Rights Reserved.