South Africa’s state-owned insurer, Sasria SOC Ltd., has built up a 20 billion-rand ($1.1 billion) financial cushion to protect itself against future civil unrest. The move comes four years after the company was forced to seek a 22 billion-rand bailout from the government following widespread riots in July 2021.
Those riots, which erupted mainly in the KwaZulu-Natal and Gauteng provinces, resulted in the deaths of 354 people. The violence was sparked by the imprisonment of former President Jacob Zuma and was fueled by deep frustration over unemployment and poverty. Sasria had to pay out around 32 billion rand to cover damages from the unrest, which included looting of retail shops and warehouses.
Mpumi Tyikwe, Sasria’s CEO, explained that the insurer is now prepared to handle significant events without leaning on taxpayers for support. “We can handle a significant event now. I think anything up to 20 billion rand Sasria would be able to handle without tapping the taxpayer,” Tyikwe said in an interview.
Sasria specializes in covering damages caused by public disorder, labor strikes, and terrorism — areas that many commercial insurers avoid. Established in 1979 after the Soweto uprising, the company has a long history of responding to social and political disruptions in South Africa.
Since the 2021 unrest, Sasria has seen its premium income grow by 88%, reflecting a higher demand for its services. Despite the damage being worst in KwaZulu-Natal, the insurer maintains the same pricing across all provinces.
Last year’s peaceful national elections helped Sasria bring 15 new reinsurers on board, allowing it to increase the maximum coverage per client to 1 billion rand. Tyikwe said the company is now in a strong financial position.
Looking ahead, Sasria is thinking about expanding its coverage to include risks faced by government agencies, such as fires, since these entities struggle to get traditional insurance. However, this would require extra capital support from the government.
The World Bank has also suggested that Sasria consider offering protection against climate-related events like floods and droughts, which are becoming more frequent. Tyikwe indicated this could happen in a couple of years but would need changes in the law.
With a growing focus on risk and resilience, Sasria seems ready to play a bigger role in helping South Africa manage the financial impact of unrest and natural disasters.