CAPE HIGH COURT DELIVERS JUDGMENT.

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Dear Intermediary

Late yesterday afternoon (Tuesday, 17 November) we received the judgment of the Cape High Court in the matter between Santam and Ma-Afrika Hotels and Stellenbosch Kitchen, related to policies with CBI extensions. The judgment was in favour of the two policyholders.

The detailed and complex nature of the judgment, as well as its broader implications, means that it needs to be carefully considered. It will also be important for Santam to discuss the implications of the judgment with all stakeholders, including reinsurers, in order to arrive at a comprehensive response.

Our reinsurers play a critical role in the insurance value chain, especially in the settlement of catastrophe-related claims such as those under the COVID-19 environment. Their view on the judgment is an important part of our decision-making in mapping out the next steps.

We are aware that you will be contacted by your clients with questions about the judgment and the next steps. We commit to preparing a detailed response to both the judgment and the questions that we anticipate clients will ask and we will share this with all of you as soon as possible.

We will also hold a webinar for our intermediary partners who have clients with CBI policy extensions to unpack the implications of the judgment in detail and discuss our next steps. Please look out for our invitation to this webinar which is planned for later next week. If you have clients with CBI cover and do not receive an invitation to the webinar by close of business on Monday, we request that you notify your Relationship Manager.

We are aware that all parties need finality as a matter of urgency, and we remain committed to doing our utmost to ensure that we achieve that as quickly as possible.

While we were waiting for the court process to run its course, we paid out more than R1-billion in relief to approximately 2 500 small and medium-sized businesses in the hospitality, leisure and non-essential retail services industries who had CBI cover. Our relief offer was received positively by clients and recognised as market-leading by our intermediaries and peers. In addition to the R1-billion, we have also committed up to R400-million in COVID-19 funding to provide relief to clients through premium reductions, premium refunds as well as direct support to insurance industry business partners, corporate social responsibility and Government initiatives.

We remain deeply committed to providing you with the best support in the industry. Thank you for the invaluable role you play and for managing expectations during this time. I look forward to engaging with you soon, please continue to reach out to us at any time.

Kind regards

Andrew Coutts
Head: Intermediated Business

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