Question NW2643 to the Minister of Finance
12 September 2022 - NW2643
George, Dr DT to ask the Minister of Finance
Whether any further cash injections will be made to the funding of the SA Special Risk Insurance Association; if not, why not; if so, (a) what total amount will be paid and (b) on what date?
Reply:
It is unlikely that Sasria will request another capital injection in the short term (two years) subject to claims due to perils insured by SASRIA not exceeding a loss ratio of 58% over that period and the reinsurance arrangements remaining the same. Therefore, in the event that an event similar to one of July 2021 occurs in addition to a loss ratio of 58%, SASRIA may need capital injections of approximately R100 million for a loss of R5 billion, R2,7 billion for a loss of R10 billion and R8,4 billion for a loss of R15 billion. This excludes any assistance that SASRIA might require to provide large corporates with an additional cover of R1 billion over and above the current limit of R500 million. SASRIA had to withdraw from providing this additional R1 billion cover due to expensive reinsurance costs that made it commercially unsustainable to give this cover. Treasury and SASRIA are working hard to find solutions to this matter as it is key to unlock further investment in infrastructure by the Private Sector.