Santam to help eThekwini manage future catastrophes
Santam has become the latest insurer to take proactive steps to mitigate poor local government administration in an attempt to reduce its risk exposure.
Last week SA’s biggest shortterm insurer signed an agreement with the eThekwini municipality to bolster the metro’s ability to handle future catastrophes such as floods, fires and droughts. The move comes after the devastating floods in KwaZulu-Natal in April and May, which cost Santam an estimated R4.4bn, making it the largest natural catastrophe in its 104year history.
Santam CEO Tavaziva Madzinga and eThekwini mayor Mxolisi Kaunda signed a threeyear partnership agreement on November 23 that will see the insurance group provide risk management support, capacity building and advisory services to the municipality, which is still grappling with the aftermath of the flooding.
The insurer also donated firefighting equipment valued at R4m to the metro, which was lambasted in the wake of the floods for poor urban planning, which some critics say worsened the disaster as drainage systems were overwhelmed by the volume of water.
“SA is still experiencing the cost of climate change first hand
— and with 435 confirmed deaths, 80 people still missing ... and more than R17bn in infrastructure damage caused by the KwaZulu-Natal floods earlier this year, the cost is simply too high,” said Madzinga.
“The events and devastation ... are still very fresh in our minds, and as Santam we know we can utilise our expertise and experience in risk management to ensure eThekwini is better prepared for the next disaster, which, due to climate change, is likely to occur again.”
Santam’s move to assist the municipality mirrors similar public-private partnerships initiated by other insurers in an attempt to mitigate the effect of poor local governance on their bottom line. For example, Discovery Insure and Dialdirect Insurance launched the Johannesburg Pothole Patrol in May 2021 in an attempt to address the city’s decaying roads, which had led to a spike in insurance claims linked to road surface damage.
In the case of Santam’s assistance to eThekwini, the metro will gain access to an online planning support tool known as the Green Book, which provides quantitative scientific evidence on the likely effect that climate change and urbanisation will have on SA’s cities and towns.
The tool also assists municipalities with developing climate change responses or adaptation plans and is supported by the Centre for Scientific and Industrial Research (CSIR), the National Disaster Management Centre and the department of forestry, fisheries & environment.
The agreement forms part of Santam’s Partnership for Risk and Resilience (P4RR) programme, which aims to help SA communities become more resilient to disasters triggered by natural hazards. The programme has provided disaster risk management support to 82 municipalities that are home to about 12.5-million people across the country.
Kaunda welcomed the establishment of this important threeyear partnership as it will not only equip municipal teams with relevant tools but it will also go a long way in building confidence within communities in the city’s ability to adequately deal with emergencies and disasters.
“It is our hope that what Santam is doing will inspire many more companies to join forces with government,” said Kaunda.
Given the state of SA’s ailing public infrastructure, such partnerships may be the best option for an insurance industry trying to reduce its risk in an increasingly challenging operating environment.