SHAREHOLDER ACTIVIST GROUP HITS OUT AT SANTAM

THE SHAREHOLDER activist organisation Just Share put out a blistering press release this week after attending Santam’s annual general meeting on Tuesday. An edited version of the statement reads:

“When asked by Just Share whether it would reconsider its position in light of a recent judgment against insurer Guardrisk, Santam stood firm in its position that it will ‘seek clarity from the courts of South Africa’. The board also would not commit to a binding arbitration process to expedite the matter. This is surprising, given that the Western Cape High Court has provided legal clarity already, finding

unequivocally in Café Chameleon v Guardrisk Insurance Company Ltd

that the Covid-19 outbreak – not the lockdown – is the legal and factual cause of the claimant’s losses, and that the insurer must pay out the claims.

“Santam’s position is in stark contrast to chief executive Lizé Lambrechts’s statement on the company’s website that Santam is ‘absolutely committed to playing our part to help alleviate some of the devastating impacts of this virus’.

“Insurance Claims Africa (ICA), a public loss adjustment firm, is representing approximately 500 affected businesses. Collectively,

the total value of their claims with all insurers involved is between R3.5 billion and R4bn.

“Many of Santam’s business continuity policyholders are facing imminent closure, threatening the livelihoods of the thousands of people employed by them. Santam has chosen to go to court to obtain ‘legal certainty’ in the interpretation of the disputed policies. Unlike the insurer and its immensely deep pockets, these businesses cannot wait months or years for the resolution of a court process. ICA has already approached Santam with a reasonable settlement proposal, but has been turned away.

“In a Sens announcement released [this week], Santam says that it ‘understands the financial distress on the businesses and individuals impacted by the national Lockdown to combat Covid-19’, and that it also recognises ‘the public interest in this matter and [is] therefore seeking legal certainty by having this matter speedily determined by the courts of South Africa’. It is hard to reconcile this with the company’s actions, which point to a complete lack of awareness of the impacts of its insistence on taking a lengthy, expensive legal approach.”

Emma Schuster of Just Share says: “At the start of the lockdown,

we witnessed an outpouring of grand gestures and public commitments to corporate kindness by big companies. Santam was no exception. If there is legal ambiguity in the clauses of the policies held by these small businesses, Santam should take an approach which is in line with its public claims to care about the impact of Covid-19 on the South African economy and on its clients’ businesses. Instead, the company seems determined to take a short-sighted approach which is eroding its reputation, and which will contribute to the devastation of a swathe of the small tourism and hospitality businesses which are so essential to the economy.”