While insurers are now facing court procedures about their refusal to pay out on Business Interruption (BI) claims from the tourism and hospitality sector – and are seeking their own legal counsel – there are signs that the lobbying efforts by the tourism and hospitality sector are starting to pay off.
This is the opinion of Executive Head of SATIB Insurance Brokers, Dewald Cillié, who said SATIB had received feedback on its submission – requesting immediate interim relief to prominent insurers – with a request to discuss the matter further.
“I know the prospect of further discussions does not elicit much reassurance at this point. It must feel like old news, what with all the various discussions since March leading us in circles. But I sense the mounting pressure is working in our favour,” he said.
Cillié explained that the proposal document (submitted last week) outlined why this relief was so critical, what the impact had already been on tourism and hospitality, suggested mechanisms for relief and “pointed out at length what is at stake if relief does not come urgently”.
“It has always been abundantly clear that the majority of SATIB’s clients’ businesses will not survive long enough to hear the outcome of the court's decision. Hence our consistent approach on this matter over the past months.”
He said SATIB expected to reach an outcome within the next few days. “We
have proved that our proposal – which lays out before insurers the need for immediate relief and the importance of a timely engagement between insurers, reinsurers, UMAs, Cell Captive Managers, the Financial Intermediaries Association (FIA) and Financial Services Conduct Authority (FSCA) – is more than compelling.”
He pointed out that, to further motivate its call for action, SATIB had been sharing its actions with the industry’s brokers and had presented the proposal to the FIA, which is engaging with the FSCA.
“Encouragingly, the FSCA appears increasingly receptive to our industry’s plight. This is off the back of its announcement last week that the national lockdown cannot be used by any insurer as grounds to reject a claim, and its promise to take action against those insurers who do not treat their customers fairly.”
According to Cillié, what is needed now is for the FSCA to challenge reinsurers who, insurers claim, are responsible for tying their hands in the matter thus far.
Government intervention sought
Meanwhile, loss adjustment firm, Insurance Claims Africa (ICA), has written to the Minister of Finance. Tito Mboweni, formally requesting his urgent intervention in the dispute between over 500 tourism and hospitality sector claimants who have been denied pay-outs on their BI claims.
ICA CEO, Ryan Woolley, said the firm has asked for Mboweni to facilitate potential settlement discussions.
“Businesses in the tourism and hospitality sector have been the hardest hit by the pandemic. With domestic and international travel halted and the continued uncertainty around when the sector will be allowed to operate, many businesses have been forced to close and to lay off employees,” he said.
These are the casualties…
Tourism Update has asked readers to share their BI stories – which will be published over the next few weeks – with many, like owner of the Safari Club, Cara Lloyd, highlighting that they are tapping into personal resources to stay afloat.
“I am in the process of selling assets (my personal furniture, property and vehicles) in order to keep my company afloat and have had to retrench the majority of my staff to stay alive in order to make it through this pandemic and give my staff their jobs back when the government allows travel again.
“I am having to do this while I am insured for outbreaks and viruses that come within 50km of my hotel which I have paid thousands of rands a month for,” she said.
One hotel owner in the Western Cape told Tourism Update earlier this week that one of her staff members had committed suicide amid the fear and uncertainty of not earning an income for the foreseeable future.
