Risk is far from random – it’s patterned, predictable, and increasingly shaped by climate volatility, asset lifecycles, and shifting behaviours. This is according to a report from Standard Insurance, released yesterday.
The insights in the report are based on an analysis of claims data accumulated from 2019 to 2024. Standard Insurance processed more than 100 000 claims a year across property, motor, and commercial insurance lines, with an average of R1.8 billion in claims paid each year. The average claim payout was R12 700 for personal lines property, R35 000 for personal lines motor, and R1.7 million for commercial fire losses.
Standard Insurance says the report shows how extreme weather events, ageing infrastructure, and demographic changes are reshaping the short-term insurance landscape for households and businesses. The aim is to encourage a shift from reactive responses to proactive strategies.
Johan van Greuning, the head of Standard Insurance, said the claims data and insights can help South Africans to understand how risk behaves so they can act before disaster strikes. “Insurance isn’t just about reacting to loss. It’s about anticipating it, preparing for it, and protecting your future.”
Riaz Mia, Standard Insurance’s chief operating officer, said events are no longer isolated; they’re statistically shifting the claims landscape.
In the business context, Mia added that the report – produced in partnership with Standard Bank Group’s climate and equity research teams – offers climate risk insights to help businesses prepare better, build resilience, and ensure swift recovery in times of disaster.
Dini Nondumo, the head of commercial insurance, said businesses need to evolve from thinking about insurance merely as a reactive safety net and instead as more of a strategic partner that helps to protect operations, infrastructure, and financial continuity.
The report documents a dramatic shift where storms and other extreme weather events have overtaken theft, fire, and accidental damage as the leading cause of short-term insurance claims. Weather-related perils such as storms, hail, and floods accounted for 41% of the total claims value in 2022 alone.
The 2022 KwaZulu-Natal floods caused R62.3 billion in losses, with only R32bn insured. More than 31 000 jobs were lost, underscoring how uninsured shocks leave deep economic scars.
Infrastructure vulnerabilities amplify these risks, as seen in a R4.5bn flood damage lawsuit by a major motoring company against municipal stormwater failures, illustrating how poor public systems can escalate insured events into broader crises.
What the data discloses
The report highlighted the following patterns and trends.
Water damage is main peril for households
For households, the report identifies water damage as the predominant peril, driven by geysers, burst pipes, and storms, accounting for 60% of all home insurance claims.
Top five home perils (by proportion of number of claims):
- Geyser – 27% often related to burst, leaking, or malfunctioning water heaters in households.
- Storms – 18%, often linked to structural damage to roofs, walls, and windows.
- Pipes – 9%, often leading to hidden damage in walls and floors.
- Geyser and resultant – 8% hidden damage in walls and floors because of pipe claims.
- Lightning – 4% direct damage (to structures, appliances, and electronics) or indirect damage (power surges through electrical systems).
CAT events are the main threat to property
Storms and catastrophic weather events (CATs) are driving the highest volume of claims for home and commercial property insurance claims. A quarter of all storm and CAT claims over the five years included in the data occurred in 2022. There was a slight decrease in 2023 (21.09%) and 2024 (20.53%). Policyholders might have been unprepared in 2022, triggering preventive measures in subsequent years, Standard Insurance said.
Claims surge after four years
Claim volumes generally peak between 4 and 10 years of coverage, with a notable spike around the fourth year of policy tenure, particularly for incidents such as burst pipes and geyser failures, signalling a critical period tied to asset lifecycles.
There is significant claim activity from year 21, which likely relates to ageing homes, where major systems are out of warranty and maintenance is overdue, or because renovations become more common.
Women take the lead in asset protection
Short-term insurance is seeing a shift in traditional norms as women are increasingly managing and protecting assets. Women, particularly those aged 34 to 44 and those who are unmarried or divorced, are increasingly taking the lead in managing and protecting household assets.
Middle-aged drivers lead in road accident claims
Middle-aged drivers (35 to 44) file the highest number of vehicle claims, particularly for windscreen and accidental damage. However, their average cost per claim (ACPC) is the lowest across all age groups, suggesting common but lower-severity incidents. This may reflect higher vehicle usage, routine wear-and-tear, or cautious driving habits.
In contrast, drivers aged 18 to 24 submit fewer claims, but those claims are 35% more expensive than the portfolio average. This points to higher-severity events, likely driven by inexperience, riskier behaviour, or underinsurance. Despite their lower claim volume, the financial impact of their incidents makes them a critical risk group, Standard Insurance said.
Drivers aged 45 or older moderate claim frequency and cost, reflecting a balanced risk profile overall. Yet they are not without challenges. Age-related factors (such as slower reaction times, changes in vision, and overconfidence from years of driving) may contribute to incident rates that although not severe, are still notable. Their claims may be less about recklessness and more about physiological shifts that subtly affect driving performance.
Top two vehicle perils
Within the personal lines motor section, 62% of registered claims are attributed to accidental damage collisions.
- Accident drivable (47%): These cases typically involve vehicles that can be driven after the incident, suggesting lower-severity damages.
- Accident not drivable (6%): These are accidents where vehicles are damaged beyond immediate use but are not completely written off.
- Accident write-off (9%): The vehicles are declared total losses, indicating severe accidents with high repair costs relative to vehicle value.
Within the same section, 29% of registered claims are attributed to windscreen damage, making it one of the most frequent but typically lower-cost claim types.
Fire: the ‘silent heavyweight’ in the short-term risk portfolio
Fire-related claims represent the smallest number of incidents but yield the highest individual payout amounts. Fire losses represent about 1% of the registered claims on personal lines property and motor but account for at least 15% of the total payout value from 2020 to 2024.
A major commercial fire resulted in a gross claim of R183m, the highest single claim recorded in the past five years.
Homeowner age gap: seniors claim more, but young owners pay the price
Standard Insurance’s analysis of household claims over the past five years found distinct patterns across age groups:
- Policyholders aged 18 to 24 account for less than 1% of total claims, yet their average cost per claim (ACPC) is 35% above the portfolio average, indicating fewer but significantly more expensive incidents – likely influenced by inexperience, riskier behaviour, or underinsurance.
- In contrast, the core working-age population (25 to 54) represent nearly 70% of all claims and demonstrate cost efficiency, with a combined ACPC 7.7% below the overall average. This suggests a high volume of manageable claims and a stable risk profile.
- Policyholders aged 55 or over contribute 29.56% of household claims, with an ACPC 12% above average. Although their claim volumes are relatively high, the cost uplift is modest, pointing to increased asset vulnerability without excessive financial impact, Standard Insurance said.
Age-based policy duration trends for homeowners
Across all age groups, there is a general decline in policyholders as the policy duration increases, except for the 55+ group, which maintains a strong presence even after 21 years.
- The 35 to 44 and 45 to 54 age groups have the highest concentration of policyholders, particularly for longer policy durations (5 to 10+ years). This suggests that individuals in mid-life are more likely to invest in home insurance and maintain it over time.
- Those aged 18 to 24 and 25 to 34 show a higher number of newer policies (1 to 4 years), indicating recent market entry. Retention appears lower, possibly because of lifestyle changes, mobility, or affordability.
- Those aged 55+ show a steady presence across all policy durations, with a notable increase in long-term policy holders (10+ years). This indicates strong retention and possibly higher asset ownership.
Eight-year itch and 21-year surge: vehicle age and policy tenure
Standard Insurance’s analysis of vehicle insurance claims found patterns that highlight how policy tenure influences claim behaviour:
- New policyholders (less than one year) tend to file fewer claims – likely because of initial caution or limited exposure to risk.
- A noticeable peak in claims occurs around the eight-year policy mark, particularly for accidental damage and windscreen repairs. This may reflect a tipping point in vehicle wear or usage patterns.
- Policyholders with 21+ years of coverage show significantly higher claim activity, often linked to ageing vehicles and the increased likelihood of mechanical or structural issues.
Implications for individuals, businesses, and insurers
According to Standard Insurance, the research has profound implications for individuals, urging homeowners to take proactive steps such as storm-proofing and geyser maintenance to reduce exposure.
With only 20% of South Africans holding short-term insurance, millions remain vulnerable, and disasters can push families into debt and poverty cycles. The findings encourage viewing insurance as empowerment and a resilience tool, rather than a grudge purchase, enabling individuals to protect homes, cars, and livelihoods from financial ruin.
For businesses, the implications involve integrating short-term insurance into strategic planning, conducting climate vulnerability assessments, reviewing policy adequacy, and using claims data to guide capital allocation.
In a nation with unemployment around 33%, businesses as job creators must safeguard against closures from fires or floods, which could trigger job losses and supply chain disruptions.
Van Greuning said: “Insurers cannot close the protection gap alone. Joint investments with government in infrastructure resilience, education, and inclusive insurance products are vital to safeguard business continuity and national stability.”
The report also positions insurers as strategic allies in building resilience, particularly in the face of climate-linked volatility.
The Prudential Authority (PA) has formally initiated the integration of climate-related risks into its regulatory and supervisory framework. In May 2024, the PA issued a guidance notice titled “Climate-related Governance and Risk Practices for Insurers”, outlining approaches insurers should adopt to manage climate-related exposures.
“This marks a pivotal shift in how the industry must respond. The pace and unpredictability of climate-related events are challenging traditional actuarial models. If businesses underestimate their exposure, they risk catastrophic losses that could destabilise entire sectors,” Standard Insurance said.
