Dawie Buys, manager at South Africa Insurance Association (SAIA), told CNBC Africa that the recent 5.3 magnitude earthquake experienced would inform price adjustments in the sector going forward.
“The actuaries are taking note of what is happening at the moment and obviously making adjustments in the predictions,” he said.
(WATCH VIDEO: The short-term insurance industry – Part 1)
Anton Ossip, chief executive officer at Discovery Insure commenting on the recent earthquake said the challenge was getting more people insured as it was likely that the most affected by the tremor were uninsured.
He further explained that the number of those affected by the earthquake was not huge hence would not overwhelm the short term insurance industry sector.
Ossip added that a bigger earthquake hitting populated areas would be a big concern for any insurer in South Africa or globally.
“Over the past years it has been hailstorms that have had significant effect in terms of costs in the sector and a number of claims so we are bracing ourselves as the rainy season starts,” noted Ossip.
“The volume of claims is still small our assessors are working in areas affected to see the severity of the situation but the unfortunate thing could be that the most affected are not insured.”
Ossip explained that the challenge in the industry was in getting more people insured as currently in the automotive sector about a third of cars were insured with two thirds outside insurance cover.
(WATCH VIDEO: The short-term insurance industry – Part 2)
He notes that the short term insurance is one of the sectors to be affected when a country goes through a financial recession hence was not largely viewed as a priority.
Online insurance defines short term insurance as encompassing all types of policies other than life insurance.
Amongst others the short term insurance includes vehicle, property, household, medical, personal liability, travel and business insurance.