2010 strike action costs insurer more than R100m

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Strike action.jpgBusiness Day reports that strike-related insurance claims worth more than R100-million were lodged with the state-owned special risks insurance company Sasria in 2010.

Sasria is South Africa’s only insurer for special risks such as riots, strikes, political and public unrest, civil commotion and labour disturbances.

"SA has experienced escalating protests and protracted wage negotiations which have a negative effect on the economy through extensive damage caused to property and the cost of interruptions to business, " Sasria chairperson Cyril Ramaphosa said in the insurer’s annual report tabled in Parliament.

"Such protests reflect mounting discontent at the level of service delivery in certain areas coupled to the ever present rumblings about corruption and the perception of increasing rather than decreasing social inequality despite government’s focus on job creation."

The extent of the claims has particular significance in light of [a ruling in September] by the Supreme Court of Appeal that trade unions could be held responsible for damages caused when their striking members go on the rampage.

The court decided in favour of the applicants — traders and motorists — who claimed R70 000 from the South African Transport and Allied Workers Union after a violent strike in Cape Town in May 2006, reports Business Day.

Last year Sasria wrote premiums of R1-billion and paid out claims of R250-million - of which about R175-million was for strike-related incidents. Historically more than 80% of Sasria’s claims resulted from political and nonpolitical riots, but since 2008 such claims have steadily dropped, while strike-related claims have risen since 2006 and now account for 70%, up from 55% the year before and 34% in 2008-09.

The run-up to last year’s local government elections saw an increase in service delivery riots. "Such riots always cause damage, leading to an increase in the number of claims although their value tends to be marginal," the Sasria report said.

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