South Africa: Effect of Loadshedding, state of the economy, and small business entrepreneurs.
South Africa with 208 consecutive loadshedding days in 2022, and the trend worsening in South Africa in 2023, have Insurers, Risk Managers, and Reinsurers with their tails up, with a spate of power surge claims from Individuals to Small Business.
Big Companies to name one, MTN as published beefed up their risk management and alternative power supply, with a price tag of R 695 million.
With 1799 Small businesses closing down in South Africa, in 2022, not all can afford an expensive Solar system or other solutions. These people and Individuals can at most afford a Generator, which does not deliver pure stable 220 volts, and sometimes even on Eskom power, you find power fluctuations.
This led to the major Insurance Companies in South Africa excluding Power Surge Claims from their policies. In the event of a loss, the user will now even be worse off, therefore the number of businesses closing down, and Individuals cancelling policies, will increase.
A solution and an opportunity are for a Broker or Insurer to put together a First Loss Cover policy for a power surge loss, meaning you buy a fixed amount for say R 50 000.00, irrespective of the size of the loss, and you will at less receive an amount of money to put you back in business.