South Africa's only special risk insurer, Sasria, has restored a critical layer of insurance capacity for large corporates facing escalating risks linked to civil commotion, riots, strikes, public disorder and terrorism.
The product, Wrap Cover, returns to the market nearly five years after it was withdrawn following the July 2021 unrest, which caused insured claims to exceed ZAR31bn ($1.9bn) and fundamentally reshaped the global political violence insurance market.
The relaunch indicates Sasria’s renewed ability to handle large-scale risk and occurs amid rising concerns among businesses about the cost and availability of political violence insurance, the insurer said in a statement. The capital base has also grown substantially, with own funds rising to ZAR18.6bn, placing Sasria well on course to achieve its ZAR30bn capital reserves target by 2029. The enhanced capital position, combined with improved underwriting and risk governance frameworks, has enabled the insurer to cautiously resume gradually returning excess cover capacity to the market.
After the product was withdrawn in 2021, many South African companies had to turn to international markets to obtain political violence cover, often at much higher premiums. In many cases, that pricing reflected global reinsurance volatility rather than South Africa’s underlying risk profile, said Sasria CEO Mr Mpumi Tyikwe.
“This created an unsustainable situation for companies operating in South Africa. The Wrap Cover represents a market-correcting intervention aimed at restoring locally priced risk protection.”
Relaunched product
Structured as an Excess of Loss (XOL) product above Sasria’s ZAR500m primary coupon, the relaunched cover offers additional insurance capacity for companies with substantial asset bases and concentrated business interruption risk.
The relaunched Wrap Cover includes:
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Excess protection above Sasria’s ZAR500m primary coupon
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A limit of ZAR500m, reduced from pre-2021 levels
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Reinsurance arrangements aligned with prudential requirements
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Dedicated corporate underwriting and strengthened governance oversight
The product has been intentionally redesigned to promote long-term sustainability while allowing Sasria to fulfil its mandate as the insurer of special risks,” Mr Tyikwe said.