Severe Weather Puts Pressure On Insurance Firms' Earnings

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severe weather puts pressure on insurance firms earnings

S P Global Ratings has warned that earnings for South African insurances companies were likely to be pressured this year following extreme weather events that left a trail of destruction in the Eastern Cape and KwaZulu-Natal provinces earlier this month.

This comes as the National Disaster Management Centre has classified the severe weather events in the Eastern Cape and KwaZulu-Natal as a national disaster, after floods and a tornado ripped through the provinces.

Earlier this month, heavy rains accompanied by strong winds resulted in severe flooding in most parts of the Eastern Cape, displacing more than 2 500 people, especially in the Nelson Mandela Bay and Buffalo City metros while a tornado ripped through Tongaat in Durban a few days later, leaving12 people dead and over 7 000 homes destroyed.

Some businesses have also been bracing for possible disruptions after the police deployed reinforcements in the aftermath of the elections, particularly in KZN as the province has previously been rocked by violent protests and looting during civil unrest.

S P yesterday said downwards pressure on earnings for the insurance industry can be expected in the aftermath of the adverse weather conditions in the respective areas.