“Our tale is of a rather sobering scenario that should urgently be considered by those planning for the Garden Route’s future […] in this possible future, fires would rage with abnormal intensity, seriously threatening homes, crops, plantations and people and […] such a scenario now seems a strong possibility rather than an unlikely and distant outcome.”
The above extract is from an article entitled ‘How no-man’s-land is now everyone’s problem’ which was written by botanists and ecologists Richard Cowling, Brian van Wilgen, Tineke Kraaij and Jonathan Britton for the quarterly magazine, Veld and Flora in 2008. It chronicles the management history of large tracts of land in the Outeniqua and Tsitsikamma mountains, how alien vegetation posed a significant threat to humans and their infrastructure in surrounding areas and suggests strategies for intervention.
Nine years later, the “sobering scenario” became a flaming inferno.
In the context of one of the largest catastrophic events in the history of the South African short-term insurance industry, the focus is now on the intensity and frequency of catastrophes and how insurers should review their roles in society.
While it goes without saying that insurers can’t predict when catastrophes occur, managing catastrophe claims requires significant coordination and planning. In the case of the Southern Cape fires, nearly 10 000 residents had to be evacuated and homes, schools, structures and basic communication and power infrastructure were destroyed. The first of its kind, the local fire chief pronounced the fire South Africa’s first Type 1 incident – a type of fire which requires a response at the national or provincial level.
The impact on short-term insurance claims will be substantial. Natural catastrophes generally result in mass claims and large claims. Besides processing thousands of claims as quickly and effectively as possible, insurers also have to cope directly with the effects of a catastrophe (destroyed communication and power infrastructure), making claims handling extremely difficult. In the wake of the devastation, most insurers responded according to their catastrophe protocols and where possible, reached their clients through intermediaries, social media, emergency helplines or directly through regional/area managers, loss adjusters or claims handlers. They also dispatched response teams to assist people – including those who had total losses. In many instances, insurers paid affected clients an upfront amount nearly immediately after the fires – in a bid to assist those who needed help with basic amenities – while ensuring that all other claims were being efficiently assessed.
While it’s true that most insurers have a catastrophe management plan and protocols in place, many analysts agree that these plans need refining and that an increase in the severity and frequency of catastrophic events demands a revision of the way in which insurers respond to it at the outset.
A global framework to help governments better prepare for disaster risk and improve the resilience of nations and communities to disasters was adopted at the United Nations (UN) World Conference on Disaster Risk Reduction in March 2015. Here, in particular, specific roles for the insurance industry were identified, including strong public-private partnerships that drive disaster risk reduction and resilience at the local and national levels.
Within the greater UN framework, there appears to be an urgent need for better collaboration between various stakeholder groups (i.e. local municipalities, the greater business sector, communities and the insurance industry) to help identify and mitigate risks while building forms of resilience against potentially devastating natural disasters.
Reactively, the insurance industry’s responses to the Southern Cape fires appear to be adequate, but a more pro-active approach would possibly have been to put in place effective protocols by compelling and assisting local authorities to ensure they have the most effective resources in place to deal with the risks they face.
Moreover, better collaboration coupled with advancements in technology should further engender a robust understanding of the ecological interaction of different types of vegetation and, among others, better flood plain and river corridor management in South Africa. The consequences of overlooking the systemic interaction of these (and other scenarios) with communities are well-recorded.