As the dust begins to settle following the 2024 South African National Elections, it’s clear that political landscapes can shift rapidly, bringing with them a host of risks. This year’s elections, which resulted in no outright majority winner, have led to the formation of a Government of National Unity (GNU). While this cooperation among diverse political parties is a promising step toward unity, it also raises concerns about stability and the potential for political violence.
The Role of SASRIA and PVT Cover
The South African Special Risks Insurance Association (SASRIA) SOC Ltd. is the only non-life insurer in the country that provides cover against special risks such as civil commotion, public disorder, strikes, riots, and terrorism. This cover is crucial for individuals and businesses that own assets in South Africa. However, following the significant property damage during the July 2021 riots, SASRIA’s coverage has been limited to R500,000,000, which may not be sufficient for large and corporate businesses.
This is where Political Violence and Terrorism (PVT) cover becomes essential. PVT cover provides protection against physical loss caused by terrorism, sabotage, riots, strikes, civil commotion, and malicious damage. It can also be extended to cover insurrection, revolution, rebellion, mutiny, and coup d’état. PVT cover is taken out in addition to SASRIA cover, ensuring comprehensive protection for businesses facing substantial risks.
Recent Events and Rising Risks
South African Elections and GNU Formation
The recent South African elections saw the formation of a GNU, with multiple parties coming together to govern. The involved parties include the African National Congress (ANC), Democratic Alliance (DA), Patriotic Alliance (PA), Inkatha Freedom Party (IFP), GOOD, Pan Africanist Congress of Azania (PAC), Vryheidsfront Plus (FF+), United Democratic Movement (UDM), Rise Mzansi, and Al Jama-ah. However, the Economic Freedom Fighters (EFF) and uMkhonto we Sizwe (MK), despite gaining a significant number of votes, especially in KwaZulu-Natal (KZN), have not joined the GNU. This exclusion may lead to unrest among EFF and MK supporters, potentially turning KZN into a hotspot for political violence and assassinations.
Global Political Unrest
The attempted assassination of former U.S. President Donald Trump during a political rally in Butler, Pennsylvania, is a stark reminder of the volatility that political events can bring. This incident, part of a broader pattern of political challenges in 2024, highlights the global nature of political violence risks. With over 64 countries heading to the polls this year, the potential for political upheaval is significant.
The Importance of PVT Insurance
The increasing frequency and intensity of political violence worldwide underscore the importance of PVT insurance. Political violence can cause extensive damage to infrastructure, disrupt transport and supply chains, and create economic instability. For example, the attempted coup in Bolivia, a country with significant lithium reserves, could have far-reaching consequences for the global supply chain of electronic devices and energy storage systems.
Political violence also affects business continuity. According to the BCI Resilience in Conflict Report 2022, nearly all organisations are affected by conflict, with many having to shut down part of their operations or temporarily close across entire geographies. These disruptions highlight the need for businesses to have robust risk management strategies in place.
Mitigating the Risks
To mitigate the risks associated with political violence and terrorism, businesses should conduct thorough risk assessments to identify vulnerabilities and potential impacts on operations. Implementing flexible plans and ensuring comprehensive PVT coverage are crucial steps in safeguarding assets and maintaining business continuity.
At International Health and Specialty Risks, we have the expertise to assist with obtaining quotations and providing guidance on placing specialised PVT cover. This is the time to ensure that your underlying SASRIA cover and PVT are correctly placed to best protect your assets and business.
In an era of unprecedented political activity and instability, the importance of PVT insurance cannot be overstated. By staying informed and proactive, businesses can navigate the complexities of political risks and ensure their resilience in the face of potential disruptions. As we look ahead, let’s prioritise the protection of our assets and the well-being of our businesses through comprehensive PVT coverage.