Stay ahead of emerging risks in the year ahead

South Africa’s insurance industry faces a shifting landscape of threats, with rising digital vulnerabilities, escalating natural disasters, and business interruptions likely to define 2025.

“These challenges are not unique to South Africa but as risks grow more interconnected, businesses and individuals must adopt proactive strategies to mitigate disruptions and safeguard their assets,” says Molebatsi Langa, Head of Retail Strategic Accounts at Old Mutual Insure.

Below she discusses the biggest risks ahead for policyholders in 2025, drawing on the latest Allianz Risk Barometer.

Implications of infrastructure challenges

Gauteng's deteriorating infrastructure, which causes water supply issues and power outages, poses significant insurance risks for businesses and consumers alike. The city’s ongoing water crisis, with supply cuts lasting up to 86 hours, has already disrupted daily life and business operations.

Langa cautions, "After loadshedding, we now face a water shortage crisis that could have far-reaching consequences. It also presents new risks, for example, low water pressure severely impacts fire-fighting efforts, as fire engines need a reliable water source to extinguish fires."

In response to the growing concerns about water shortages, Langa provides the following tips for businesses and homeowners:

For businesses:

• In many cases, installing a sprinkler system is mandatory. However, if the water pressure is too low, those sprinklers are effectively useless. Businesses should consider boosting their current systems, for example, by installing large water tanks to ensure they can adequately respond to emergencies.
• Don’t rely solely on a single water source. It’s important to think beyond traditional water supplies, such as tapping into groundwater or implementing rainwater harvesting systems to ensure more reliable access.
• Invest in building infrastructure to future-proof properties against extreme weather events. Flood-proofing buildings, reinforcing drainage systems, and ensuring plumbing are up to standard can considerably mitigate the impact of water shortages and flooding.
• Businesses should also consider installing foam-based fire suppression systems as an alternative, alongside gas-based or dry chemical fire suppression options.
• Inform your insurance provider about any fire mitigation measures implemented in your business to ensure they are aware of the complexities involved and that your coverage remains valid.

“Regularly maintain fire suppression equipment, with inspections typically conducted every six months, and make sure to obtain a certificate to confirm compliance,” she adds.

For homeowners:

• When purchasing a property, it’s important to check for adequate water points or hydrants in case of a fire.
• Don’t solely rely on municipal water sources; explore alternatives, such as groundwater or rainwater harvesting systems to ensure more reliable access.
• Consider investing in flood-proofing measures for your property, like raising platforms at key points (such as your garage entrance) and creating water channels to direct water away from your property.

“Businesses should consider installing foam-based fire suppression systems as an alternative, alongside gas-based or dry chemical fire suppression options. Businesses need to research and understand their responsibilities when supplying products to consumers.”

Cyber incidents

Cyber threats, including ransomware, data breaches, and IT disruptions, continue to dominate the global risk landscape. As highlighted by recent reports, over 3 300 cybercrime incidents occur weekly, affecting governments, financial institutions, and individuals worldwide. In South Africa alone, cybercrime is estimated to cost R2.2 billion annually, with organisations experiencing an average of 1450 attacks each year — a figure that’s risen by 4% year-on-year.

“It’s important to note that business interruption cover does not traditionally include cyber risk – this is a niche and specialised solution. This cover typically protects against losses or damage resulting from natural perils, like fire or flood, and other physical incidents, but not cyber-related risks. Businesses should consult with their insurance company or broker to ensure they have the right cover for business interruption and, if needed, additional cyber cover.

Climate change

“Climate change is a global risk, but in South Africa, local context it becomes magnified, through for example inadequate infrastructure and regional changing weather patterns,” says Langa. These challenges make South Africa particularly vulnerable to climate-related disasters, and property owners have a key role in ensuring that their properties are disaster-ready.

According to the WEF Global Risks Report 2025, extreme weather events are ranked as the second most severe risk in the outlook for the next two years, with the risk rising to first place over the next decade. This highlights the urgent need for proactive measures, both on a national scale and within communities, to address the growing threats posed by climate change.

Below are Langa’s top considerations that property owners should keep in mind:

• Regularly inspect your property to ensure that roofing, plumbing, and drainage systems are in good condition. Identifying and repairing issues early can prevent greater damage during extreme weather events.
• Where possible, install flood barriers or flood-proof doors at vulnerable entry points to protect your property from rising water levels. These barriers can act as a first line of defence during heavy rainfall.
• Regularly review and update your insurance policy to ensure it includes coverage for climate-related risks, especially if you're in a flood-prone area. Work with your broker to ensure that your policy reflects any recent improvements to your property.
• Consider implementing sustainable landscaping practices, such as planting water-resistant plants or installing permeable paving, which can help absorb excess rainwater and reduce the risk of flooding.