The tourism and hospitality industry has been suffering under the current lockdown regulations in South Africa. A new report from StatsSA shows that an urgent insurance settlement is likely the best solution to curb the current job losses and closures.
This is not the first time the insurance settlements have been brought up in relation to the hospitality industry. During the #jobssavelives protests across the country, restaurant owners called for insurance companies to honour their contracts and pay-out the insurance settlements to help the industry stay afloat.
The new report states that without these claims being filled, 600 000 jobs will be lost.
Despite having bought insurance to cover infectious, contagious and notifiable diseases, major companies such as Old Mutual, Santam, Hollard, Momentum (HIC /Guardrisk), Bryte and Thatch are claiming that these contracts don’t cover pandemics and that the industry is suffering because of lockdown, not because of the pandemic itself.
‘While we are ready to meet the insurers in court, this is not going to be a speedy process. Every day that payouts of these valid claims is delayed is another nail in the coffin of these businesses,’ said Ryan Woolley, CEO of Insurance Claims Africa.
‘Many of the larger operations which have been around for years will survive, albeit with continued retrenchments, but much of the industry is made up of small businesses, which simply do not have access to the critical cash flow needed to sustain them through the pandemic. Already, 49 000 small businesses in the tourism industry have been impacted so severely that it seems unlikely that they will reopen.’
The refusal to pay out is also in direct conflict with the Financial Sector Conduct Authority’s (FSCA) order to do so. The FSCA said that the insurers’ conduct goes against the principles of treating customers fairly and breaks down confidence and trust in the insurance sector.
‘We are once again saying to the insurers: in the spirit of solidarity, let’s find a way to reach a responsible settlement which will offer these businesses a lifeline to pay their staff and stay afloat. A fair and responsible settlement will also go a long way in restoring trust in the insurance industry, whose reputation has been battered as they continue to reject claims,’ said Woolley.
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Image credit: Cape Town ETC/Screenshot
