Update on the Compulsory Third Party Motor Property Insurance Report
The initial research by PwC on a potential implementation model for Compulsory Third Party Motor Property Insurance (CTPMPI) in South Africa has been completed.
The study performed by PwC included:
- Desk-based research performed into the international experience surrounding compulsory third party motor property insurance;
- Engagement with relevant stakeholders through completion of an electronic survey as well as interviews; and,
- Actuarial/Statistical Modelling to assess potential costs/funding.
The report provides information on CTPMPI models in developed and developing economies. It further includes the results from the survey and follow-up interviews as well as the probable costs.The SAIA Board and the Board Committee: Insurance Risks have however requested additional research and we anticipate that a revised report will be received within two to three months.
Business for Road Safety Forum meeting with the Department of Transport
The Business for Road Safety (BRS) Forum met on 13 May 2016 with Ms Thandi Moya, Senior Director: Road Safety from the Department of Transport (DoT) where she presented on the Department’s revised draft road safety strategy. The Department is obtaining input from various stakeholders on the strategy and plans to finalise it by the end of June 2016.
The Forum suggested to the DoT that a workshop be held where members of the BRS Forum could identify appropriate projects to support from the DoT’s priority list.
OEM Warranties and Controls Issues
Save a Car Project
At the SAIA/NAAMSA Task Team meeting it was agreed to commence with the Save-a-Car Project. The aim of the project is for insurers and OEMs to find solutions to reduce the number of motor vehicles which are considered uneconomical to repair and focusing on those motor vehicles that are marginally exceeding the thresholds set by individual insurers. Further details on this project will be communicated to SAIA members and other parties once a framework has been agreed to.
Motor Body Repair Issues
Update: NSR / MSR Standards
The minimum standards document for Non Structural Repair (NSR) and Major Structural Repairs (MSR) by Bureau Veritas is approaching completion.
Subsequently, a number of workshops have been held with the last workshop to take place at the end of July 2016 to refine and finalise the standards.
The SAIA is in the process of sourcing additional funding needed for the implementation and auditing of the standards.
Property and Other Insurance Projects
Systemic and Emerging Risks Committee
The Board Committee: Insurance Risks agreed to a proposal of converting the current Electrical Grid Working Group to a newly formed Systemic and Emerging Committee.
This committee will initially focus on non-motor systemic and emerging risks and over time expand the scope, if needed. It is envisaged that the committee will issue an annual list of systemic and emerging risks within South Africa for the short-term insurance industry. The committee’s scope will also include earthquake risks and climate change.
A revised proposal for the Probabilistic Seismic Hazard and Risk Assessment for the Gauteng Province was received from the University of Pretoria and Council of Geoscience late 2015.
The revised proposal was discussed at the length by the Board Committee: Insurance Risks and it was agreed that this particular proposal should be made available to only those members who would be interested to receive the assessment report and who will be willing to share the costs amongst themselves. It was confirmed by the University of Pretoria and the Council for Geoscience that taking into account the amount of work and the extensive number of maps that will be created in this project; they would need six to seven months to complete the project.
It is anticipated that the research will be completed by December 2016.
Agricultural Insurance Project
The SAIA Agricultural Committee met with other key stakeholders in March 2016 to discuss the affordability of agriculture insurance cover for crops. The meeting was attended by the World Bank, Senior representatives from the National Treasury (NT), the Department of Agriculture, Forestry and Fisheries (DAFF) and the Land Bank.
The NT emphasised the importance of obtaining data from SAIA members, as requested by the World Bank, as it would enable them to intervene adequately and to assist the Agricultural Insurers, thereby contributing future food security for South Africa.
All the necessary data has been submitted to the World Bank and SAIA expects feedback from NT and the World Bank in July 2016.