Insurers know we differ
http://personalfinance.iafrica.com/insurance/2595880.htm

Gender, like age or smoking, is used by financial services companies to predict risk profiles and set the price of premiums.

For instance, we know that women visit their doctors more frequently and, of course, they have babies. Some health-insurance providers therefore charge women more for their medical policies. Back in 2008, the National Women’s Law Centre in the US published a report on health-insurance companies that found that, in that country, the average 25-year-old woman could thus pay almost 45 percent more for her health plan than her male counterpart did.

Posted via email from SA Insurance

Having Your Car Roadworthy Clear For Insurance Purposes
http://www.articlelisted.com/Art/51683/226/Having-Your-Car-Roadworthy-Clear-For-Insurance-Purposes.html

When we see road accidents involving taxis or old buses, we normally contribute it to driver error. In a lot of cases, this is not always the only factor. Nearly all these vehicles are not roadworthy. But what is roadworthy? Roadworthy implies that the vehicle isn’t fit to be driven on public roads and motorways. In South Africa, it is a full legal requirement to have your motor vehicle roadworthy before you drive it. To be able to obtain a roadworthy certificate for your vehicle, you have to go to the registered authorities in your city.

Not only is a roadworthy vehicle required by law, but insurance companies will and do refuse to pay out claims if the vechile was not roadworthy at the time of the incident. 

Posted via email from SA Insurance

Motor Insurance For Under 25s
http://www.articles2win.com/Art/143230/226/Motor-Insurance-For-Under-25s.html

All insurance packages are based on risk. The greater your risk to the insurance company, the higher your premium will be. This goes without saying that under 25s are the highest category risk for car insurance. No matter how good a driver a young person is, they will also have the statistics against them.

There are many insurance statistics which prove that the most amount of road deaths are amongst youths under the age of 25. Youths under the age of 25 are also more likely to disobey traffic rules and conduct themselves in reckless manners such as driving under the influence of alcohol or drugs. Males younger than 25 are even more likely to take risks whilst driving, and will therefore have to pay a higher premium than females under the age of 25.

With all these collisions due to drivers under the age of 25, the insurance companies take a huge financial knock. Due to the proven statistics, it can be very hard for under 25s to obtain affordable motor insurance. Driving without auto insurance is not a choice, so there have to be methods of under 25s acquiring good, solid motor insurance that protects them and other motorists on the road.

If you’re an under 25 obtaining motor insurance, you should also take into consideration that your premiums won’t only be higher, but the cost of your excess too. There are some small ways to lower your premium if you are an under 25, ways of making the premium lower than it has to be. Remember that the motor vehicle you drive has a huge determining factor in your insurance premium. If you drive a flashy sports car, or a modified vehicle, you will pay an even higher premium. Firstly, this is because these vehicles are made to go faster, and couple a youth with a fast car and you have the highest insurance risk possible! Try to get a list of cars that are on insurance companies’ blacklists so that you’re not buying a vehicle that is known to be too fast, notorious for being in accidents, or highly targeted by thieves.

Having good security on your motor vehicle helps a lot with the cost of motor insurance. Installing a good alarm system and keeping the vehicle in a locked garage overnight will help greatly with car insurance premium cost.

The last thing you need to do is shop around. Compiling a lot of quotes and seeking as much information as possible will only help you to find the lowest premium possible. There are some insurance companies who offer discounted premiums to youth drivers who have taken an advanced driving course. There are even some insurance companies who will offer a lower premium to an under 25 who has a degree, as that could portray them as being more responsible.

Author Resource:->  For the best general auto insurance in South Africa visit http://www.payasyoudrive.co.za.

Article From Articles 2 Win 

(via Instapaper)

Posted via email from SA Insurance

Increase in SUV and 4×4 sales – but are they correctly insured?
http://carinsurance.arrivealive.co.za/increase-in-suv-and-4×4-sales-but-are-they-correctly-insured.php

SUV/ 4X4 and insurance risks

Many SUV owners might not buy the vehicle for its 4×4 ability, but having these capabilities at hand, might provide additional safety concerns. We have referred to purchasing considerations as including the ability to go “anywhere” and the perceived “tough guy image”. This is exactly where the additional vehicle insurance risk can be found!

Owning and driving a 4×4 vehicle does not mean that the driver is capable of driving off-road safely. Without proper training a 4×4 could be dangerous in the hands of the inexperienced driver. Too many 4×4 vehicle roll-overs occur when drivers drive these vehicles at incorrect speeds and without the proper technique on gravel roads!

(via Instapaper)

Posted via email from SA Insurance

JOHANNESBURG (Reuters) – South Africa’s total industry new vehicle sales increased by 20.7 percent year-on-year in June to 39,931 units, the National Association of Automobile Manufactures (NAAMSA) said on Friday.

This must be good news for car insurance companies in South Africa after a very slow 2009. 

Posted via email from SA Insurance

Compulsory basic damage insurance on vehicles is being considered by the government, but appears to be a long way from becoming a reality.

“It’s going to take a while… we’re still in the very early brainstorming stage on this,” transport ministry spokesperson Logan Maistry told Sapa on Friday.

He was responding to questions after Transport Minister Sibusiso Ndebele’s announcement on Thursday, in a written reply to a parliamentary question, that the government was “considering making third party insurance a requirement in South Africa”.

With over two thirds of 8.5 million vechiles on SA roads uninsured, this might be a good idea. We’ve all heard stories and complaints where you have to pay for accidents, even if it is not your fault, and the insurance companies fail to reimburse you for the excess. 

Posted via email from SA Insurance

The group’s financial side, which only deals with credit cards for now, will be joining forces with Liberty Life Insurance to bring consumers simple, transparent insurance products, including life insurance.

The Chief Executive Officer of Comair, Gideon Novick, said that “the combination of Kulula’s strong brand and market agility and Liberty’s experience and infrastructure is a good business fit and will bring a refreshing change to these financial services.”

Read the full article at:

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One of the main characteristics of the average insurance policyholder, no matter what the economic climate, is that he or she is usually not entirely sure what the insurance actually covers.

As such, says the Managing Director of Alexander Forbes Insurance, Gari Dombo, many people are paying for insurance that they don’t actually need.

“Most people have a very vague idea about exactly what is covered along with the extent to which it is covered,” said Dombo.

Read the full article at:

http://bit.ly/W2pvP

The crunch comes as household medical expenses rise, benefits are reduced — and doctors want to charge patients a staggering 300% more.

Industry experts warned this week that even a top-end comprehensive medical aid was no longer a guarantee of adequate coverage. As early as March, they claimed, members had exhausted their medical savings, from which most out-of-hospital expenses come.

The Sunday Times has established that by mid-year:

• 70% of members on cheaper medical aid packages had run out of funds;
• 40% to 50% on middle level options had run out; and
• 20% on top-end executive packages had run out.

The 2009 Blanket Drive took off on the 15th of June with the 94.7 Ground Patrol team visiting various shopping centres where members of the public could donate blankets, clothes or money. OUTsurance showed their support by donating two blankets for every person who called OUTsurance for a quote.

“We realised that there are many people who would love to help those in need but simply don’t know where to start. That’s why OUTsurance made it easy for people to help the less fortunate this winter. And it didn’t cost them a cent”, said Peter Cronjé, Head of Marketing for OUTsurance.

Read the full article at Roadsafety.co.za

Here’s a short quote:

We recently read of the risk of significant increases in car insurance premiums. This can be attributed not only to the high number of vehicle accidents on our roads, but also to criminal activity such as hijackings and vehicle theft!

Motor vehicle insurance has been described as a necessary evil – even if you pay cash for a motor vehicle and you are the most cautious of motorists, you are at great financial risk if you drive an uninsured vehicle.

Read the full post over at carblog.co.za

Just how heavily the dice are loaded against bank assurance group Old Mutual’s pulling itself quickly out of the mess left by its misguided acquisitions and expansions of the past few years became more apparent with this past week’s release of the first quarter’s interim management statement.

As had been forewarned, business arms are being ditched or sharply curtailed across the globe.
However, the business declines that have arisen from this are being accompanied by recession-induced slowing growth or downturns in other divisions.

Organic rather than acquisition growth will be central to prospects for a good few years.

Read the full article on The Times website

The beleaguered home affairs department attempts to do away with “fraudulent deaths” and urges South African citizens to confirm whether they are officially alive. This follows after an increasing
problem with identity theft by criminals who are trying to benefit from life insurance policies.

The local government minister Richard Baloyi urged citizens at a press conference to not only confirm your alive status, but also called upon citizens to check if they are legally married. The criminals are engaging in identity theft to arrange fake marriages for migrants seeking citizenship.

Read more at:
http://www.google.com/hostednews/afp/article/ALeqM5hqpg8fI5W5NxS6r1k2YC1zCNIKiA

This syndicate’s activities have been closely monitored for some time and it is believed that corrupt police and border officials have been assisting these criminals. Over the past three years this syndicate has been active in this area and have reportedly stolen a large number of luxury vehicles in South Africa.

A large number of stolen vehicles have been recovered by the police, some of which had been reported as stolen more than three years ago. Most of the recovered vehicles were stolen in Pretoria, Johannesburg, Durban and the Free State.

Police report that mop-up operations were underway and that another possible 20 vehicles were likely to be recovered.

Investigations revealed that this syndicate stole these vehicles to defraud insurance companies as the majority of the recovered vehicles had been taken as part of car insurance fraud scams.

This type of insurance fraud costs the country approximately R1-billion annually according to the South African Insurance Agency (SAIA). This agency was established in an attempt to combat the major threats posed to the country by insurance fraud.

In a recent thunderstorm trees were uprooted, roofs caved in, walls and houses collapsed, cars washed away, and in some areas water mains had burst, leaving a trail of destruction.

Residents have been urged to now prepare for the possibility of more storms.

In the same week a storm in Greater Taung in the North West left more than 500 people homeless.

Villagers in Vergenoeg, Molelema, Kokomeng and Longaneng lost their homes when the storm lashed through the area on Friday night.

In 2006, Greater Taung was hit by a storm that saw 2 000 houses in 40 villages destroyed.

As caravans normally exceed 750kg, drivers with a “B” code may not tow a caravan behind their vehicles.

Before you get behind the wheel to tow your trailer or caravan on holiday, make sure that you are doing so legally and complying with the conditions of your caravan insurance.

Car Insurance companies are urging drivers to check their licenses to determine whether they are entitled to drive a vehicle that is towing another heavy vehicle in excess of 750kg behind them.

New traffic laws in South Africa stipulate weight categories of either over or less than 750kg. If your caravan or trailer weighs less than 750kg, which not all of them do, then your ordinary license will suffice. If however the caravan or trailer weighs in excess of 750kg then drivers need to reapply for a license to tow vehicles of this weight.

If your license does not entitle you to tow things weighing over 750 kg and you do so, this could result in your insurance company repudiating your claim if you were to be involved in an accident.

The problem people will be facing if they were unaware of this new law is that it is highly unlikely that they will be able to schedule a learners and drivers test before they leave for vacation.

Drivers who obtained their first drivers license prior to 1998 and who had a code 08 license would have been re-issued with a code “EB” license which permits a driver to tow a vehicle with a mass of up to 3500kg.

Car insurance companies have warned drivers to check that their licenses have not expired, and if so to apply for a temporary license and to ensure that they have the necessary towing license. This will provide you with the certainty that your insurance covers any accident related damage.

If you are towing a trailer be sure that you comply with the new legislation which states that all trailers have a minimum-width reflective band applied around the entire trailer, available at most AA outlets. Motorists are warned that fines will issued if the trailer does not have the correct reflective tape applied on the rear and both sides of the trailer.

Santam Insurance wants to make homeowners aware of the fact that their empty homes may be very susceptible to break-ins and that they must take needed preventative action that will help them steer clear of stress and financial damage upon returning from their holidays. 

Santam recommends that homeowners identify likely risks that will help avoid problems in their absence. The insurance company has some safety tips for homeowners this festive season. 

First off all, an empty house is a very attractive and easy target. So, homeowners must make potential burglers believe there are people in the house, even if there is not. This can be achieved by preventing rubbish bins form being overfull, mail accumulating in the mail box and newspaper deliveries from pilling up on the doormat. 

Robbers look around for empty houses because it makes their job a lot easier. Santam advise homeowners to put their newspaper deliveries on hold for the duration of their holidays and that they ask their friends and neighbours to keep quiet regarding their vacation. News spreads fast and it might just end up reaching the wrong pair of ears. 

Santam also recommend leaving lights and televisions on in the empty house for the duration of the holiday. This will add to the elusion that someone is home. Motion detector outside can light up an unwanted visitor on the property at night. 

Houses must be protected on the in- and outside. It is a good idea to add high-quality locks and to fit security deadlocks on all main doorways. 

A final note from Santam is to make sure you don’t provide tools to make the thieves’ job easier. Store all ladders, tall objects and tools in a locked garage so that they can not get onto your roof and breaking a window poses a bit more of a challenge.

Following the right steps in the incident of your car being stolen is just as crucial. All insurance companies find it compulsory that on finding out that your vehicle has been stolen it be reported to the cops immediately. To prevent further loss and contribute in the recovery of your car, the responsibility is on you as the owner of the motor.

A theft case must be opened and a file number has to be obtained from the police. If you fail to do so it could be construed as committing fraud and you could endanger your right to claim from the insurance company. If you don’t notify this to the police then it will just increase the chances that the thieves will escape by giving them more time to get away with your motor.

If the vehicle was stolen from a parking lot where there is security, report it to the security office so that they can certify that security was in place.

Notify your insurer immediately and demand for written verification of this notification. Supply them with the relevant documents for non-standard security items and if the car was driven by any other person than the insured at the time of the theft supply them with a certified copy of the driver‚ the license and identity documentation of the driver.

Inform the appropriate financial institution if your car is subject to a hire purchase or lease. Define the outstanding loan amount and bear in mind that you still have an obligation to keep up the monthly repayments both on your car debt and your insurance policy until your claim has been settled in full.

If the insurance compensates you for your loss in the time that the car is not recovered then you are no longer the owner of the stolen car. If the vehicle was dependent to a Hire Purchase or Installment Sale, the Insurers would have noted their interests on the policy and would have reconciled any outstanding debt before paying out the balance to you.

The stolen motor is now the property of the Insurance Company and if the car is found subsequent to your claim been paid the vehicle must be handed over to the Insurance Company. If you do not do this then it is considered as fraud and a criminal offense.

Most of the insurers usually give the insured the decision to buy the stolen motor back when it is found. If you are interested in acting out this alternative then you should be aware of circumstances that could significantly impact on the value of the recovered car.

Before the insurance company paid our claim then the vehicle would have been scrapped. The vehicle will need to be registered as a Code 3 vehicle and identified as a Built Up vehicle on the registration certificate if it has to be re-selled. The police will assign a new VIN number beginning with AAPV if the VIN number has been tampered with. No dealer will pay the full market price for a vehicle and therefore you must ensure that if you buy back your car that you get a substantial discount on the market value thereof.

To avoid over-insurance this asset, make sure that you insurance the re-purchased vehicle at the price that you paid to purchase it from the insurers.

One of the most common examples of insurance fraud involves an insured person staging a house burglary, hiding the goods, and then reporting them stolen.
When a house robbery does, in fact, take place, the insured will often inflate the loss or claim for goods they did not own. False claims for expensive items such as cellphones, state-of-the-art television sets, jewellery and laptops are high on the list of fraudulent short-term insurance claims.

Many fraudulent claims are the work of organised criminals who entice innocent people to get involved, with the prospect of making a quick buck. These criminals tell the insured where to leave the car so it can be ‘stolen’ or what to do to burn a house, hide its contents and claim from insurance.

Claims for fake car thefts are just as rife. The insured waits until the car is safely out of the country or its identity is sufficiently been disguised, before submitting a claim for a stolen car. In such cases, the insured would benefit twice, firstly by selling their car to the fraudsters and then by getting paid out by the insurance company.

The short -term insurance industry recently took a positive step towards fighting insurance fraud and crime with the launching of the South African Insurance Crime Bureau (SAICB).

The SAICB was established to attend to the ever increasing problem of insurance fraud and crime and organised insurance fraud in the short term industry.

This board was the result of many years of investigation, research, debate and fact finding missions by the short-term insurance industry through the South African Insurance Associations’ (SAIA) Fraud Committee and Task Team.

The SAICB currently has eleven member companies including Santam, Mutual & Federal, Hollard, Zurich, Lion of Africa, Regent, OUTsurance, Absa Insurance, Standard Insurance, Telesure and MiWay.

Insurance fraud costs the short-term insurance industry a lot of money annually, which obviously also impacts on the cost of insurance. The SAICB believes the current approach to insurance fraud is fragmented and ineffective and aims to provide a platform to improve governance over the management of shared insurance data, driving short and long term cost savings, and leverage existing shared data to detect organised fraud and develop an investigative approach to managing fraud events impacting multiple insurers.

The SAICB became fully operational on 1 November 2008.

As a high level of trust is required between the insurer and the UMA the integrity and reputation of the UMA partner is of paramount importance to the insurer and the broker. Reputation risks also arise if there is a lack of alignment between the various parties’ interests.

Ruthless underwriting managers operating in the 1980’s and 1990’s and the negative publicity as a result, damaged the reputation of underwriting managers. Fired by a passion to improve the image and restore the credibility of this section of the Insurance Industry, in the late 1990’s a working committee was elected to form an association and it was then agreed the SAUMA would set strict criteria for membership.

SAUMA operates as an association not for gain (a Section 21 company) and ensures that its members comply with the SAUMA Code of Conduct and Practice and deals with complaints against its members.

Many underwriters and administrators with years of experience found themselves retrenched as a result of mergers and liquidations and with a passion for the insurance industry many of them continued their trade by establishing niche UMA’s. The growing number of resultant UMA’s provides both brokers and consumers a greater choice and the increased competition keeps insurance premiums in check.

There are opposing perceptions of UMA’s and one is that these enterprises are established to make profits at the expense of policyholders. People sharing this view are under the impression that UMA’s will minimize the number of claims they pay, motivated by an eagerness to please the insurer.

These people have a misconception of the key marketing tool for insurance companies – their willingness to pay claims. Insurance companies do not want to risk their reputation and would not tolerate slow or non-payment of claims by their agent. This is particularly true in cases where an excessive number of claims are referred to the ombudsman for short term or long term insurance. Long-drawn-out disputes serve nobody and it is in everyone’s interests to limit the number of cases referred to such bodies.

The opposing view is that the increase in UMA’s offers both brokers and consumers a wider choice of both insurers and insurance products that have been dwindling over the past few decades as a result of consolidations. These people welcome the UMA’s and recognize the benefits that these enterprises offer the insurance industry.

As with any industry there are good role players and then there are the bad ones. A good indicator to evaluate the integrity of a UMA is to determine whether the UMA is a member of the South African Underwriters Management Association.

Thousand of hectares of fynbos in the Overberg were destroyed before the fire spread from the Grabouw side of the mountain to the Cape Town side of Sir Lowrys Pass.

According to a spokesman for the Metro-emergency services nine firemen have been taken to the Vincent Palotti hospital to be treated for inhaling of smoke.

The R44 between Gordon’s Bay and Rooiels was closed for traffic since 13:30 on Monday. Early afternoon on that day residents from Kogel Bay and Rocky Bay and later residents of Suikerbossie and Faure Streets in Gordon’s Bay were ordered to evacuate their homes. Law enforcement and emergency personnel were on the scene to assist these residents.

A number of roads in the area have been closed to traffic and dense smoke on the R44 to Kleinmond made visibility a hazard and resulted in this road being closed to traffic.
Residents and members of the public are urged to exercise caution in the vicinity of fires

Hundreds of firemen are battling gale-force winds which continue fanning the two raging mountain blazes in the Overberg as conditions favourable for runaway fires persist. On Monday the SA Weather Service issued a high fire danger rating for the rest of the week.

City firemen had to cope with at least five fires in the Atlantis area during the same period that the two major fires in the Overberg were blazing. The City of Cape Town said that in three days, more than 120 shack fires had been reported in 11 informal settlements and three people had been killed.

The city’s Disaster Risk Management Centre was on full alert as the high temperatures and strong winds are expected to continue, increasing the risk of runaway fires. The South African National Defence and Airforce has been requested to be on standby to assist with aerial firefighting.

People needed to exercise caution to reduce fire risk during the current weather conditions and need to ensure that their insurance is adequate.

Gordon’s Bay is one of the favourite holiday destinations in the Cape Town area and it is hoped that the fire will not dampen the holiday spirit.

The executive head of new and external markets at Santam, Mpumi Tyikwe, said that the insurance company aims to enter the Nigerian and Ghana market in the next 18 months.
He added that Santam also wants to increase its shareholding in Nico Holdings during the following 18 months. This is a Malawian insurance company of which Santam is already a 25.1 percent shareholder.

According to Tyikwe, the board had approved this and gave his division the green light in August.

The reason these countries was selected because they offer enormous business opportunities, due to the fact that many of its citizens do not insure their valuables and/or properties. Another reason is that these countries’ insurance laws are almost the same as in South Africa.

Santam wants to enter the market in these countries by buying companies or by obtaining shares of 40 to 45 percent in established companies.

Santam is moving into these markets because they are small. Tyikwe also said that Santam has to move quickly because after the gap had been taken it will be extremely difficult to enter these countries.

A senior portfolio manager at Cadiz African Holdings Asset Management, Rajay Ambekar, said that Santam is the main insurer in South Africa and there is no reason why they should not spread out into the rest of Africa. He added that Africa has its risks, but there is also money to be made.

This big move puts Santam way ahead of Mutual & Federal, South Africa’s second-largest short-term insurer, as Mutual & Federal had no intentions to extend into Africa.

Ambekar said that he suspects that Mutual & Federal rather wants to focus on the South African market and to improve its operations here.

Other countries that Santam is looking at include Angola and Mozambique, because of both growth and economic improvements.

Santam will continue to expand into other English-speaking countries, because others such as Egypt and Morocco pose some difficulties. They already have a lot of business and their legislation will be a problem. Despite all of this, Santam is still studying these markets for potential expansion in the future.

The first major mountain fire hit the heart of the Cape fauna and flora area this weekend and continues to burn in the mountains above Gordon’s Bay. The fire broke out on Saturday night and threatened tourist sites in the Elgin Valley. (UPDATE: See Holiday Destination On Fire )

With the anticipated increase in veldfires make sure that you know how to react to veldfires when you are on the road. If you spot a veldfire in the distance pull over on the side of the road and assess the situation. If the fire appears to be out of control or close to the road, make a u-turn and drive in the opposite direction of the fire.

If you have been trapped by the fire you will need to find a suitable place to park your car to enable you to use the vehicle to shelter you from the intense radiant heat.

Your vehicle will offer the best available level of protection from the radiant heat as the fire front passes, so remain in the car. Close all windows and doors and switch the air conditioning off and shut all the air vents. Stay in the car until the fire front has passed and the temperature has dropped outside before cautiously exiting the car. Be extremely cautious as the internal parts of the car will be extremely hot.

On the same day that the first mountain fire broke out, a prominent Thai Restaurant, Chai Yo, in Durban Road, Mowbray was destroyed by fire. An electrical fault in one of the businesses in the Campground Centre building is believed to be the cause of the fire.

Ocean Fresh, African Kaleidoscope and another business was also destroyed by the fire.

Traffic was diverted away from the fire and three fire trucks attended to the blaze within minutes of it starting.

Fires in buildings and homes can cause immense damage in a very short space of time and no property owner can afford to be without the appropriate fire insurance, included as an insured peril on most insurance policies.

Damage running into tens of billions of rands caused by rising sea levels is a very real threat facing South Africa’s coastal cities and regions. According to a study commissioned by the City of Cape Town there is a 20% chance that huge pieces of coastal land could be flooded by 6,5m waves within the next quarter of a century. Until the results of this study were made public it was considered highly improbable that this would occur within the next hundred years. Although this type of flooding is still only seen as a probability catastrophic storms over the next 25 years are considered almost a certainty. 

Both the more powerful and more frequent storms experienced in the area and the rising sea levels are consequences of climate change and global warming. These climate changes will have a profound impact on the livelihoods and circumstances of poor people living in the Cape Town district and could result in the salination of the water table. There are large sections of Cape Town that are currently only a few meters above sea level and according to current predictions the water in these areas could become saline and therefore unsuitable for agricultural use in the not too distant future.

The rising sea levels would eventually make natural water unfit for human consumption and would start to erode concrete structures. Fishing as a livelihood would be threatened which will have a negative impact on the city’s poorer residents.  

Although many other towns, cities and settlements on the countries coastline are also currently subjected to climate change this has been developing at a relatively slower rate but experts are still concerned about the evident danger to these areas imposed by a changing environment

Companies and the South African government are gradually beginning to integrate potential threats posed by climate change into their strategies. Short-term insurer Santam has realised that understanding and managing climate change is essential to the company’s sustainability. The increase in volume and value of insurance claims resulting from unpredictable weather patterns and extreme natural disasters has become a threat to the future existence of all insurers.

Considering that Cape Town recently experienced the worst storms in 30 years the time is ripe for insurance companies to revisit climate change and consider the effect it will have on short-term insurance and future insurance claims. Insurance companies will need to reconsider their costing criteria on which current homeowner’s and house- insurance rates are based.

Santam, considered one of the market leaders in the insurance industry, is currently embarking on a project whereby they will make use of a geographical information system to enable them to analyse the risk potential of any given client. This data will assist them not only with regards to the risk exposure to floods but will include other perils such as fire and theft. This strategy is still in its infancy and Santam has not as yet announced any immediate increases in rates for high-risk areas

Insurance companies will need to analyse their client base with particular attention to beachfront properties and properties built on floodplains. Santam’s strategy includes working closely with and advising local municipalities to prevent further developments taking place in high risk areas. If it is known that certain high risk properties could become uninsurable this will have a negative effect on the property values, which will act as a deterrent for property developers to invest in these properties. This strategy will help to contain the current exposure of insurance companies

On the legislative side the proposed Bill on Integrated Coastal Management, will provide for the establishment of a coastal protection zone above the high-water mark. Certain activities will be prohibited in these areas and there will be strict control over development which will be subject to environmental impact studies. This will give the state the power to prevent development of areas too close to the sea.

The risks of climate change pose a direct threat for the sustainability of insurers’ existing business models. It is therefore entirely logical that Santam and other asset insurers will re-assess their exposure to these risks.

In the meanwhile the insurance industry and the public at large are waiting with baited breath to hear exactly how the insurance of existing high risk clients will be affected.

According to a recent article in Cape Times on November 26, 2008 a frightening number of Cape Town motorists pulled over at roadblocks have tested positive for drugs, with a third of Mitchell’s Plain drivers testing positive for tik, according to South Africa’s first drug-driving report.
The tests were carried out at roadblocks between April and November, and the report put together by Trimega Diagnostics, working with the SA Police Service and traffic officers in Gauteng and the Western Cape. About 30 percent of motorists tested in Mitchell’s Plain, Hout Bay and Sea Point tested positive for drugs in the field study using the drugalyser, which was officially launched towards the end of November 2008.

According to the article in the Cape Times, Ashley Uys, Trimega Diagnostics co-founder, said people tested positive for drugs at all hours of the day.

All of this information is extremely perturbing considering that the use of the drugalyser is in its infancy and apparently is currently only in use in the Cape Province. For innocent and sober motorists on the road it is pretty disturbing to know that a large majority of other road users are under the influence of either narcotic or alcohol. This sheds some light on the abnormally high rate of accidents on our roads if combined with the number of vehicles that are not roadworthy, drivers that are incompetent even when sober, lack of a large number of drivers to obey traffic regulations, such as speed limits and the generally less than optimal conditions of our roads.

In view of all of the above it has become absolutely imperative that all motorists are adequately insured thereby minimising their losses in the unfortunate event of an accident. Insurance companies are sure to amend their policies, if the policies are currently so worded, to exclude liability for accidents that take place when the insured is under the influence of narcotics. If you have in the past been guilty of any of these offences then it is time to rethink your responsibilities to both yourself, your family and all other road users before it is too late.