IIG News

2021…A YEAR MOST OF US WOULD LIKE TO FORGET, OR NOT REALLY?

As Sasria, what are the lessons of 2021 and that we are taking into 2022?

When the world was hit by the Covid-19 pandemic in 2020 and subsequently went into lockdown, we all looked forward to 2021 when governments, businesses and households would be recovering and trying to return to normal. And as the financial services sector, particularly the insurance sector, we were aware of the challenges brought on by the situation and were looking forward to changing gears, and fully adapt to the new normal.

This turned out not to be an easy or smooth fete. As an insurance provider, Sasria realised it had a lot to review, learn and relook in its operating model, especially when looking at the most significant factors in 2021 that challenged the whole country, i.e. the pandemic and the July Unrest.

The Covid-19 Pandemic

With many businesses not succeeding due to the pandemic and demand slowing, for Sasria, business was also challenged but was not too strained as the institution had taken a leap into digitisation. “We had invested about R80 million into infrastructure and upgrading our systems which enabled us to meet the demands of a new way of working that we were plunged into due to the pandemic,” says Sasria Executive Manager: Stakeholder Muzi Dladla.

As most businesses found themselves in a pickle when they had to digitise at short notice or quicker while the evidence showed that global digital traffic and (AI) had risen by up to 50%, this meant that they had to wait, an element which was not conducive to the sustainable operation of their businesses.

“In the future, we envision Sasria to be a digital entity in the financial services space, a shifter or disruptor that recognises technology as a shifter of the ability to supply our products and services to be able to offer more value for our consumers,” says Mr Dladla.

The 2021 July Unrest

The July 2021 unrest caught everyone, especially business by surprise. The seven-day unrest cost the economy about R50 billion and led to the destruction and closure of many businesses as well as job losses. For Sasria, and other businesses especially in the financial sector, this meant massive insurance claim pay-outs which also revealed how, in future, businesses need to put defences in place to help alleviate the pressure of such shocks.

“We have been quite prudent in risk management and how we determine our maximum probable loss (MPL). However, this unrest showed us that we need to have tighter actuarial and scenario planning, like extra buffers in calculations so that we are able to withstand new emerging risks,” says Dladla.

The issue of Social inflation

As a matter of an emerging risk, the manner in which the public responds or reacts to certain political or social sentiment is one of the factors that has re-emerged as a threat to business. There is also the issue of courts overruling insurance policy conditions, through litigation, which increase insurance claims cost way above the general economic inflation that can impact business quite significantly as have been witnessed via the pandemic and the recent unrest.

“The biggest lesson here is for us to be able to closely monitor public sentiment towards political or social changes, because that is what puts entities like Sasria at risk. We are looking to implement models that will guide us to be able to gain intelligence and a sense of public sentiment that could lead to a Sasria peril,” says Mr Dladla.

Most importantly, the past year has allowed Sasria to look at the impact it wants to have on consumers as a brand, not just embedded within the underlying insurance companies. “We want to reach everyone that will benefit from our cover and to be proactive in our approach of total inclusiveness in our cover offering. Hopefully that will go a long way in encouraging all sectors of our community and business on learning more about our offering and how accessible we plan to be.”

 

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