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SIMON BROWN: I’m chatting now with Themba Sibiya, executive manager for underwriting and strategy at Sasria. Themba, appreciate the time this morning. Sasria is relaunching the R500 million Wrap Cover. This was withdrawn following the mostly KZN unrest in July 2021.
My first question is: What is the R500 million wrap cover? What is the availability, and what is it designed for?
THEMBA SIBIYA: Good morning, Simon, and good morning to the listeners. The R500 million is available for any client that is insured with Sasria, and it provides cover for buildings and standing charges. So in insurance terms, it’s material damage and NPI [Net Profit/Non-Physical Interruption].
SIMON BROWN: Gotcha. And the R500 million [is] structured. In essence, as I understand, if I had assets of beyond R500 million as a business, my challenge was finding unrest cover for that and in many cases having to look offshore – and perhaps at fairly significant higher costs.
THEMBA SIBIYA: Yes. That has been the case since we exited the programme in 2022. We’ve had a request from the market, particularly clients and brokers – and some insurers – that the pricing in the open market is excessive and some clients cannot afford to get sufficient cover because of the pricing.
So we took it upon ourselves, and we’ve negotiated with about nine reinsurers in the London market. We have the capacity now, and we are providing the coverage at further reduced prices compared to what an individual can access in the open market.
We are using the strength of the pool. So if you look at size as a pool, then you know that we can look at negotiated pricing for the pool, instead of an individual going to the open market to negotiate pricing for themself.
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SIMON BROWN: I get the point on that. You’re still going, as you mentioned, [with] nine reinsurers, but I suppose it’s almost in a sense collective bargaining. Here you’re standing as the middle person between the reinsurer and the business.
It simply gives you a better ability to get pricing.
THEMBA SIBIYA: Yes, true. The only change, maybe, that we can highlight to the clients – which is different to what we offered before – is that the rates are now based on occupancy. In the previous cover we would have just charged a ‘fire rate’ [premium rate] for anyone who wants to cover property.
But now we are looking at which industry a client falls into. So if you’re in hospitality, there’s a rate for hospitality. If you have retail, there’s a rate for retail. If you’re in mining, there’s a rate for mining as well.
SIMON BROWN: I get you – the different industries, because they will come with different risks and with different requirements as well. That comes to the point, because my next question is going to be whether this is just a return to the pre-2021 status quo. You’re saying no, this is very much a different, redesigned policy.
THEMBA SIBIYA: Yes it is. The unfortunate part for now is that we are offering less than we did prior to 2021, which is R500 million. Clients would recall that we had offered around R1 billion of cover. So the status going forward is that we need to monitor how the product functions and then find ways in terms of increasing the capacity to R1 billion – and where we can go above R1 billion, depending on how we negotiate with the insurers.
We are also looking at growing the product sideways in terms of adding other things which were not covered with the R1 billion that we offered before. So there is still a lot of work that we are planning to do, and we intend engaging the market and the clients to ask what things they would want us to add in terms of making the cover, the product, more accessible.
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SIMON BROWN: Gotcha. Sasria has a target of R30 billion in capital reserves by 2029. My understanding is that you’re on track for that. You’ve just under R19 billion and are financially on a significantly stronger footing – and improving year by year.
THEMBA SIBIYA: Yes. We are targeting the R30 billion. We were at around R20.1 billion at the end of December last year, 2025. I think we should be above R20 billion now.
But if you look at the growth, and with things remaining as they are, you will note that we should be getting to the R30 billion even before the strategic date, which is 2029.
We have been witnessing lower claim ratios, so the public is not damaging as much, and that helps us to improve on the savings part of things and to take an aggressive stance in terms of growing our capital.
The intention is to move as far as we can away from the taxpayers, so that if anything happens we don’t go back to the taxpayer like we did in 2021.
SIMON BROWN: Yes, that sort of backstop; hence the R30 billion by 2029.
SIMON BROWN: We will leave it there. Themba Sibiya, executive strategy and underwriting at Sasria, I appreciate the time today.
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