Sasria rate increase 1 February 2022: what brokers need to know

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Following the looting and unrest in Durban in July 2021, Sasria will increase their premiums substantially as of February 1st 2022.

If you’re a broker looking to strengthen your current relationships in 2022 and save your corporate clients thousands of rands per annum, this news post is for you.

This year, Sasria received a total of 14 051 claims, valued at R32 billion, relating to the unrest in KwaZulu-Natal and Gauteng in July, which largely resulted from rising emerging market inflation and the widening wealth gap.

Of all claims received, R12.6 billion had been paid out as of 15 November, with a target of settling 80% of claims up to R60 million by March 2022, following a R11 billion allocation from Finance Minister, Enoch Godongwana, during his medium-term budget policy statement on 11 November 2021.

According to Mail & Guardian, the bulk of the claims received relate to commercial fires, heavy commercial vehicles, light commercial vehicles and business interruption.

Due to the magnitude of the losses experienced after the civil unrest, violence and looting in July 2021, Sasria advised that they will be implementing a rate increase to specific classes of business with effect from 1 February 2022.

Here’s everything you need to know:

Domestic dwellings have not been affected

Domestic dwellings have not been affected, however the basic F2 – Fire Commercial rate on commercial buildings has been increased to 0.02906% (from 0.0174%).

Separation of F2 (Fire commercial)

The Fire commercial class of business was amongst the hardest hit in terms of severity of claims, however, the rate review exercise has shown that the risk within “office premises” exhibits a different risk profile to the rest of the Fire risk. As such, a separate rating structure, which is exclusively applicable to commercial Office Premises risks, will be introduced for F2 (Fire commercial – Office) with a lower rate of 0.02088%.

Rate per M2 (Light Commercial Vehicle) will increase

A Light Commercial Vehicle (LCV) is classified as any vehicle with a gross vehicle mass (GVM) of less than 3 500kg. The current rate per vehicle is R45.39 per annum per vehicle. The increase now states that the flat premium becomes a minimum premium and they are now calculating per value. Therefore, if you have a vehicle valued at R1 million, you will now pay R706.21 per annum per vehicle. That is a significant jump, particularly when considering a fleet of LCVs.

Rate per M8 (Heavy Commercial Vehicles) and trailers will increase

A Heavy Commercial Vehicle (HCV) is classified as any vehicle with a GVM of more than 3 500kg. This is the largest rate increase. With the current rate being 0.01879% of the value, a truck valued at R1 million will cost R187.90 per annum. Once the increase takes effect, a rate of .345057% of value will be implemented. So So, if you have a vehicle valued at R1 million, you will now pay R3 450.57 per annum per vehicle – a substantial jump!

The new rates will affect all new business, monthly policies on their annual anniversary date and annual policies on their annual anniversary date.

In order to save clients large sums of money when renewing their policies, we encourage brokers to suggest that clients move their renewals forward, before 1 February 2022.

If you have any questions or require additional information regarding the Sasria rate increases, please do not hesitate to get in touch with us at [email protected]

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