By: Old Mutual Insure
Old Mutual Insure remains sympathetic towards the challenges and difficulties that our customers are facing due to COVID-19 and the related government enforced restrictions. We have proactively engaged with the Financial Sector Conduct Authority (FSCA) to provide much-needed business interruption (BI) support to our SME customers across all industries. These SMEs have been hard-hit by the lockdown and are less likely to have the financial resources to survive the lockdown. We will make commercial settlements to compensate our customers with an annual sum insured of R5 million or below, for their BI losses based on specific criteria to enable them to continue operating during this difficult time.
This settlement applies to all our qualifying SME customers who had the infectious disease extension at the time of loss. We estimate that these financial settlements, combined with already submitted BI claims will amount to over R650 million and will provide settlement for half of the customers with the infectious disease extension. Old Mutual Insure is still of the view that a suspicion or the general widespread occurrence of COVID-19 in the area or any steps taken by government, as an example, to limit the spread of COVID-19 nationally, will not constitute an interruption or interference of the business under the infectious disease extension.
While we await legal certainty, we understand that many small businesses cannot wait for the conclusion of the existing court cases. With this in mind, we have decided to make these commercial settlements to stay true to our promise of being a certain friend in uncertain times. With regards to customers that do not qualify for the commercial settlement, our dedicated team of BI claims specialists continues to carefully consider their BI claims on a case-by-case basis, taking the relevant facts and policy into account.
We have already paid interim BI claims settlements, where customers can demonstrate that their businesses were interrupted by COVID-19, with either employees or customers at their premises testing positive or where their policy wordings sufficiently cover the specific losses incurred. Our focus remains to ensure that we process all valid claims as speedily as possible.
The above BI settlements are over and above the R300 million already committed to assist customers in the form of premium relief and other financial support options, and the R40 million deployed to support more than 33 SMEs to safeguard the jobs of over 413 of their employees. Old Mutual Insure remains committed to supporting our customers, now and into the future.