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Understanding the Risks of Illegally Imported ‘Grey’ Vehicles
As the demand for affordable vehicles grows, South African consumers must be vigilant against the rising threat of ‘grey’ (illegally imported) vehicles in the market. While these vehicles are often sold at attractive prices, they carry significant risks that can lead to severe legal and financial consequences. Grey vehicles are those that have been imported illegally into South Africa, without following the proper legal procedures, often bypassing customs regulations and safety standards. While they might appear to be a good deal due to lower prices, they can have hidden costs and risks. It’s crucial for consumers to be aware of the dangers associated with these vehicles. Key Statistics and Issues Grey imports contribute to significant revenue loss for the government. The National Association of Automobile Manufacturers of South Africa (Naamsa), reported that R3.8-billion per annum was lost in tax as a result of grey imports in 2020, and this figure increased significantly to R8-billion in 2022. Mikel Mabasa, CEO of the Naamsa, highlights the scale of the problem: "Illegally imported second-hand vehicles make up 7.5% of South Africa's 12.5 million car fleet. These cars are often involved in criminal activities because they are not traceable." Identifying Grey Vehicles Consumers should be vigilant and take the following steps to identify potential grey vehicles: Check Vehicle Identification Number (VIN): Ensure the VIN matches all documentation and is not tampered with. Any discrepancies could be a red flag. Inspect Registration Papers: Ensure the vehicle has a full service history and all necessary documentation, including import papers and registration certificates. Microdot Verification: Microdot verification is unique to South Africa and as such, consumers are urged to request a microdot certificate or take the vehicle to a microdot fitment centre for verification. Research the Seller: Purchase only from reputable dealers and perform background checks on private sellers. Look for Unusual Modifications: Be wary of vehicles with unexpected or undocumented modifications, which might indicate attempts to pass off a grey vehicle as legitimate. Be cautious if the vehicle model is not commonly found in South Africa. Suspiciously Low Prices: Prices significantly lower than the market average for similar models are often an indication that a vehicle may be illegally imported. Avoid deals that seem too good to be true. Consequences of Purchasing a Grey Vehicle Buying a grey vehicle can lead to severe repercussions: Legal Risks: Possession of an illegal vehicle can result in fines, vehicle seizure, and even criminal charges. In the event of an accident, the driver could face liability issues, and in some cases, jail time if found guilty of knowingly purchasing and using an illegal vehicle. Lack of Warranty and Parts: Grey vehicles often do not come with a manufacturer's warranty or after-sales support, and buyers of these vehicles are likely to face challenges in obtaining spare parts. Insurance Issues: No insurance company in South Africa will knowingly cover grey vehicles. This leaves owners of grey vehicles without protection in cases of accidents or theft. Even if a policy is initially granted, it may be invalidated upon discovery of the vehicle's status at claim stage. Financial Loss: Without insurance, owners bear the full cost of repairs or loss due to accidents or theft. Additionally, resale value for grey vehicles is significantly lower, leading to financial loss. Understanding the full scope of risks associated with grey vehicles, including insurance and liability issues, is crucial for making informed decisions. Illegally imported second-hand vehicles pose significant risks and challenges to South Africa’s economy, automotive, and insurance industries. Consumers are urged to remain vigilant and to make informed decisions. They should prioritise safety and legality, and consider the broader impact of their vehicle purchases.
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Car Advice | Understanding the Risks of Illegally Imported ‘Grey’ Vehicles
As the demand for affordable vehicles grows, South African consumers must be vigilant against the rising threat of ‘grey’ (illegally imported) vehicles in the market. While these vehicles are often sold at attractive prices, they carry significant risks that can lead to severe legal and financial consequences. Grey vehicles are those that have been imported illegally into South Africa, without following the proper legal procedures, often bypassing customs regulations and safety standards. While they might appear to be a good deal due to lower prices, they can have hidden costs and risks. It’s crucial for consumers to be aware of the dangers associated with these vehicles. Key Statistics and Issues Grey imports contribute to significant revenue loss for the government. The National Association of Automobile Manufacturers of South Africa (Naamsa), reported that R3.8-billion per annum was lost in tax as a result of grey imports in 2020, and this figure increased significantly to R8-billion in 2022. Mikel Mabasa, CEO of the Naamsa, highlights the scale of the problem: "Illegally imported second-hand vehicles make up 7.5% of South Africa's 12.5 million car fleet. These cars are often involved in criminal activities because they are not traceable." Identifying Grey Vehicles Consumers should be vigilant and take the following steps to identify potential grey vehicles: Check Vehicle Identification Number (VIN): Ensure the VIN matches all documentation and is not tampered with. Any discrepancies could be a red flag. Inspect Registration Papers: Ensure the vehicle has a full service history and all necessary documentation, including import papers and registration certificates. Microdot Verification: Microdot verification is unique to South Africa and as such, consumers are urged to request a microdot certificate or take the vehicle to a microdot fitment centre for verification. Research the Seller: Purchase only from reputable dealers and perform background checks on private sellers. Look for Unusual Modifications: Be wary of vehicles with unexpected or undocumented modifications, which might indicate attempts to pass off a grey vehicle as legitimate. Be cautious if the vehicle model is not commonly found in South Africa. Suspiciously Low Prices: Prices significantly lower than the market average for similar models are often an indication that a vehicle may be illegally imported. Avoid deals that seem too good to be true. Consequences of Purchasing a Grey Vehicle Buying a grey vehicle can lead to severe repercussions: Legal Risks: Possession of an illegal vehicle can result in fines, vehicle seizure, and even criminal charges. In the event of an accident, the driver could face liability issues, and in some cases, jail time if found guilty of knowingly purchasing and using an illegal vehicle. Lack of Warranty and Parts: Grey vehicles often do not come with a manufacturer's warranty or after-sales support, and buyers of these vehicles are likely to face challenges in obtaining spare parts. Insurance Issues: No insurance company in South Africa will knowingly cover grey vehicles. This leaves owners of grey vehicles without protection in cases of accidents or theft. Even if a policy is initially granted, it may be invalidated upon discovery of the vehicle's status at claim stage. Financial Loss: Without insurance, owners bear the full cost of repairs or loss due to accidents or theft. Additionally, resale value for grey vehicles is significantly lower, leading to financial loss. Understanding the full scope of risks associated with grey vehicles, including insurance and liability issues, is crucial for making informed decisions. Illegally imported second-hand vehicles pose significant risks and challenges to South Africa’s economy, automotive, and insurance industries. Consumers are urged to remain vigilant and to make informed decisions. They should prioritise safety and legality, and consider the broader impact of their vehicle purchases.
Home Advice | Mitigating the impact of water shortages: Practical advice for homeowners
South Africa has faced increasing instances of water shortages and extended interruptions, significantly impacting households and communities. Johannesburg and the surrounding areas are now bracing for a challenging period of water disruptions, with maintenance and infrastructure upgrades compounding the issue. Rand Water Maintenance Rand Water will conduct extensive maintenance from June 22 to July 29, 2024, to enhance the reliability and efficiency of its infrastructure. This maintenance will impact Johannesburg Water’s systems, affecting major urban areas including Ekurhuleni, Govan Mbeki, Johannesburg, Lesedi, Madibeng, Mogale City, Merafong City, Pretoria, Rand West City, Rustenburg, Thembisile Hani, and Victor Khanye municipalities. While maintenance is necessary and welcomed to prevent larger water shortage issues in the future, it presents significant challenges for residents. Geyser Safety Water shortages increase the likelihood of geyser failure and elevated pressure in water pipes, potentially leading to more frequent bursts. This, combined with power surges, heightens the risk of geyser damage. When water levels drop below the geyser’s heating element, it can cause a short-circuit, leading to electrical shock or even fire. Such events will be handled as fire claims. Proactive measures for geyser safety and maintenance: Switch off power to your geyser on the distribution board prior to water shedding and only reinstate power once the supply is restored. Allow ample time for the geyser to refill if it has run empty before reactivating its power supply. Service your geyser every three years by a qualified plumber. This involves draining the unit and inspecting its components, including wiring, breakers, anode, element, and thermostat. Regular maintenance helps minimise the risk of fires caused by short-circuits and faulty connections. Inspect the entire system for leaks and ensure the thermostat temperature on the geyser is set no higher than 60°C, as per recommended safety guidelines. Consider innovative solutions to prevent potential damage, such as online remote geyser management tools and sensor devices that allow for a predict-and-prevent approach to water risks. Assess Water Pipes & Taps With the predicted extended water interruptions, during the maintenance and infrastructure upgrades, assessing the vulnerability of water pipes is crucial. Excessive pressure when the water supply returns can damage pipes, leading to bursts and resultant water damage. Inspecting water pipes to identify and address existing damage can prevent further issues. Also ensure that taps are not left open during water disruptions. This simple measure can help prevent potential flooding and subsequent damages when the water supply resumes. Practical Water-Saving Tips for Homeowners Ahead of water disruptions, it is advisable to: Fill up containers, bathtubs, and sinks with water. Stock up on bottled water for drinking and cooking. Collect rainwater for gardening and other non-potable uses. Additionally, be mindful of these water-saving habits: Limit water usage to essential needs like drinking, cooking, and personal hygiene. Take shorter showers and turn off the water while soaping up. Turn off taps while brushing teeth, shaving, or washing hands. Wash dishes in a basin or filled sink instead of running the tap continuously. Do full loads of laundry on the shortest cycle possible. Reuse greywater for watering plants or flushing toilets. Consult your Broker Consult your broker to ensure adequate cover for geyser and water damage. Understanding your policy’s cover is vital as we navigate through extended water interruptions. Adopting proactive measures and making informed decisions will help safeguard our homes and mitigate the impact of the ongoing water crisis. By consulting a broker and implementing solutions that predict and prevent potential issues, rather than relying on reactive measures, we can better ensure the resilience and sustainability of our water infrastructure.
News | Protecting your home amidst South Africa’s water crisis
In recent years, South Africa has grappled with increasing instances of water shortages and extended water interruptions, posing challenges to households and communities. Gauteng, in particular, currently faces a daunting five years of water disruptions, with periodic shortages expected until the completion of phase 2 of the Lesotho Highlands Water Project (LHWP). The project is nine years behind schedule due to government delays and political interference. Residents should prepare for ongoing water challenges until early 2029, and this new risk exposure will require proactive management. Brace for regular water cuts While there are energy alternatives available during loadshedding, developing alternate water sources is more difficult. South Africans must brace themselves for regular water cuts in the foreseeable future, which will affect daily life and infrastructure and will be another cost and contingency to cater for. Water shortages and cuts are not only a significant inconvenience and health risk, but also increase the likelihood of geyser failure and elevated pressure in water pipes, which could lead to more frequent bursts. This, coupled with power surges due to loadshedding, means that the risk of geyser damage is higher than ever before. Geyser risks When water levels drop below the geyser’s heating element, this exposes the element to air. Since the element is not designed to be exposed to air while heating, this may cause a short-circuit, which in turn may lead to electrical shock and potentially even start a fire. Such a catastrophic event will be handled as a fire claim. It is important to note that damage to consumables is typically excluded from cover, but can be addressed through maintenance assistance services for replacement. Although most modern geysers feature fail-safe mechanisms, they are still susceptible to malfunctions. Particularly older geysers are at risk and prone to failure, which makes increased vigilance essential. Certain proactive measures should be considered as part of a risk management plan. Practical tips for geyser safety and maintenance Switch off power to your geyser on the distribution board prior to water shedding and only reinstate power once the supply has been restored. If your geyser has run empty, make sure that you allow ample time for it to refill before reactivating its power supply. Ensure that your geyser, whether electrical, solar or gas, is serviced by a qualified plumber at least every three years. A comprehensive geyser service involves draining the unit and inspecting its various components, including wiring, breakers, anode, element and thermostat. This maintenance helps minimise the risk of geyser-related fires, which are often caused by short-circuits and faulty connections, especially between the element and The entire system should be inspected for leaks, and the plumber should also check that the thermostat temperature on the geyser is set no higher than 60°C, as per recommended safety guidelines. Remote management tools and sensor devices Also consider innovative solutions to prevent potential damage, such as online remote management tools and sensor devices that allow for a predict-and-prevent approach to water risks. Wetness sensors and smart geyser technology automatically cut off water supply when leaks or faults, such as geyser bursts, are detected to protect your home from further costly damage. These sensors also proactively monitor geyser health, detecting abnormalities such as high temperature, blown elements, leaks and ruptures. If any abnormality is detected, an instant fault notification is sent to the customer, and if required, the water supply to the geyser will be shut off immediately to prevent additional damage. Assess water pipes & check taps Furthermore, with the predicted extended water interruptions, it is crucial to assess the vulnerability of water pipes. Excessive pressure when water supply returns can damage water pipes, leading to bursts and resultant water damage. Water pipes should be inspected to identify and address any existing damage, thereby preventing further potential issues before they escalate. It is also important to ensure that taps are not accidentally left open during water disruptions. This precautionary measure can help prevent potential flooding and the subsequent damages that may occur once the water supply resumes. Consult a broker to ensure you have adequate cover It is advisable to consult a broker to ensure that you understand what your policy covers in terms of geyser damage and resultant water damage. As we navigate through extended water interruptions, it becomes increasingly crucial to adopt proactive measures and make informed decisions to safeguard our homes and mitigate the impact of the ongoing water crisis as far as possible. Consult a broker and implement solutions that predict and prevent potential issues, rather than simply relying on reactive measures to repair and replace damaged systems. In this way, we can better ensure the resilience and sustainability of our water infrastructure in the face of challenges.
Business Advice | Business survival in the age of state infrastructure deterioration
The latest Allianz Risk Barometer report highlights the top risks confronting businesses in 2024, with the breakdown of critical infrastructure and blackouts or system failures emerging as the top concerns for businesses in South Africa for the second consecutive year. The Landscape of Infrastructure Challenges There is a growing importance of insurance brokers serving as essential partners in managing and mitigating business risks. Beyond traditional insurance products, brokers are now playing an increasingly critical role in procuring alternative risk management solutions aimed at preventing losses. One such example is the adoption of telematics among fleet owners and companies operating numerous vehicles daily on the roads. By analysing data such as patterns of sudden braking or swerving, indicative of encounters with road hazards such as potholes, fleet owners and companies can identify high-risk routes or areas afflicted by road maintenance issues. This enables them to implement proactive measures, such as route adjustments or advocacy efforts for road repairs with local authorities, in order mitigate potential risks effectively. National Infrastructure Plan seeks Public-Private Partnerships A recent assessment by the Southern African Development Community (SADC) reveals that South Africa needs R7 220 billion for financing new infrastructure by 2040 as part of the fifteen-year National Infrastructure Plan (NIP), translating into almost R500 billion per year. The main focus areas of the project include priority sectors such as logistics, water and sanitation, energy, information and communications, and transport. Head of Infrastructure South Africa (ISA), Mameetse Masemola stressed that the participation of the private sector is key to the delivery of the infrastructure projects. She added that government is paving the way in order to facilitate the quick and seamless establishment of public-private partnerships in order to achieve the government’s goal of securing two-thirds of the NIP funding from the private sector. The ongoing port crisis and power outages The ongoing port crisis, which has resulted in major delays caused by congestion and poor infrastructure, highlights the urgency of public-private partnerships. According to the South African Association of Freight Forwarders (SAAFF), port delays exacted a daily toll of R98 million on the nation's economy, impeding the movement of goods valued at approximately R7 billion. In December of last year, Ford South Africa President, Neale Hill, indicated that Ford had to fly freight in due to port backlogs which had a huge financial impact. Related and directly impacting insurance clients, is the availability of parts for repairs to damaged goods and vehicles. We have noted an emerging trend of clients experiencing delays in repairs to vital items, affecting their daily operations which in turn has a direct negative impact on their business. The persistent threat of power outages and infrastructure breakdowns poses significant challenges to businesses, disrupting supply chains and exerting a ripple effect on the overall economy. In November 2023, Nova Economics estimated that load shedding had cost the South African economy almost R225 billion from the first quarter of 2020 to the first quarter of 2023, detracting a cumulative 15% points from GDP growth. Global case studies and solutions The challenges we are facing locally are however not unique to South Africa and we should look to other countries where business have successfully found solutions to address similar challenges. For instance, Cemex, a global leader in building materials, has optimised its supply chain in countries like Colombia and Brazil by investing in alternate transportation routes and leveraging technology. They also advocate for infrastructure improvements in the regions they operate. Similarly, Siemens addresses infrastructure challenges in Europe by offering smart grid technologies for efficient electricity distribution and advanced signalling systems for railways, enhancing safety and reliability. Strategies for business resilience Businesses can implement the following strategies to strengthen their resilience and ensure continuity whilst partnering with their insurance broker for support in this regard: Regular Insurance Cover Review: Businesses should routinely assess their insurance policies in collaboration with their brokers to identify exclusions such as grid failure. They should also explore alternative risk mitigation strategies to minimise potential losses stemming from infrastructure failures. Infrastructure Assessment: Conducting regular evaluations of surrounding infrastructure to identify vulnerabilities is essential. This includes evaluating the condition of roads, bridges, public transport, utilities, and other critical infrastructure components. Identifying potential risks and weaknesses will enable brokers to source appropriate cover and other risk management products to allow businesses to mitigate these risks. Business Continuity Planning: Developing comprehensive plans to sustain operations in the event of potential infrastructure failures. These plans could include strategies for maintaining operations during disruptions, such as alternative transportation routes, backup power sources, and remote work arrangements. It is of the utmost importance that businesses include comprehensive business interruption cover in this strategy to ensure that they can replace any lost business income. Sharing these continuity plans with your broker is essential for evaluating any potential cover gaps should such plans need to be implemented. Investment in Resilient Infrastructure: Businesses and insurers can work with local authorities and community organisations to advocate for investments in resilient infrastructure. This may involve supporting infrastructure improvement projects or participating in public-private partnerships to enhance the resilience of critical infrastructure systems. Communication and Collaboration: Establishing healthy communication channels with relevant stakeholders, including government agencies, emergency responders, and neighbouring businesses, is essential for coordinating responses to infrastructure-related risks. Collaborating with these partners allows businesses to share information, resources, and best practices for mitigating risks and responding effectively to possible disruptions. Furthermore this allows insurers to underwrite risks more accurately and to drive innovation in product enhancements aimed at safeguarding businesses and the economy. By embracing strategic risk assessment planning with their insurance brokers, businesses can strengthen their preparedness and resilience associated with deteriorating state infrastructures, safeguarding against potential disruptions and ensuring sustained operations.
Broker Advice | Navigating the Insurance Landscape: Key Considerations for a Secure New Year
As the New Year unfolds, many South Africans should take the opportunity to reassess their insurance cover to ensure they are adequately protected against emerging risks. IntegriSure provides insights into five factors individuals should consider when reviewing their motor and home insurance policies. 1. Power Surge Cover and Load Shedding Protection South Africans have faced a challenging year, enduring over 330 days of load shedding in 2023, indicating a significant escalation in the country’s power supply crisis. In line with the frequency of unexpected power surges and load shedding in 2023, most insurers implemented significant changes to enhance their approach to power surge cover. These changes included: revised excess structures, policy wording changes, inclusion of definitions outlining what constitutes power surge, optional cover and limits, and in some instances the inclusion of waiting periods for new cover. It is therefore important to familiarise yourself with the policy conditions pertaining to your power surge cover and to understand the extent of cover you will enjoy during load shedding. 2. Cyber Cover: Safeguarding Against the Rising Threats In an era marked by escalating cyber threats, South Africa has become a primary target for ransomware and e-mail attacks. According to Surfshark’s Data Vulnerability Thermometer research, South Africa’s cyber-crime density – the percentage of cyber-crime victims among a specific number of internet users – has increased by 8% over the last year, placing the country in fifth position globally. Phishing and online payment fraud remain the most prevalent cyber-crimes worldwide. This alarming figure emphasises the importance of integrating cyber cover into insurance portfolios. We all know of someone that has been hacked or lost money to cyber criminals but many consumers are unaware that they can obtain insurance cover for themselves and their family on an individual basis. In line with the shifting cybersecurity risk landscape, cyber cover is not only essential but also affordable, and should form a crucial part of your comprehensive insurance portfolio. 3. Underinsurance: A Silent Risk IntegriSure warns against underinsurance, urging policyholders to annually review cover values to prevent being underinsured. The potential consequences are stark: a failure to increase your contents cover by a very reasonable 10% annually could result in a massive 61% underinsurance after just five years. The additional premium to accommodate for only a 10% increase in value is minimal. Also, don’t forget to ensure any new items purchased over the festive season are placed on cover. 4. Excess Structures: Understanding Financial Risk Do you know what your excesses are on your policies? All too often a cheaper premium comes with higher excesses. Going from a zero excess on your vehicle to a R20 000 excess can easily result in a 40% change in premium. You can adjust most policy excesses which remains an excellent tool to manage your risk depending on your personal circumstances and budget. 5. Risk Mitigating Services: Beyond Conventional Cover Understanding and managing insurance risks is complex. Different risks require distinct insurance products, and understanding each policy's nuances is crucial for adequate protection. As risks evolve, regularly review and update your strategy and cover to align with your current situation. Collaborate with an experienced insurance broker to help navigate policy complexities to ensure proper protection. Brokers should also play a key role in identifying and supporting non-traditional risk management solutions, incorporating elements like risk prediction and prevention. In conclusion, IntegriSure encourages individuals to review product options. Protect your hard-earned assets by consulting with your broker who will be able to provide you with options and recommendations for a suitable product to best suit your pocket and your needs.
Business Advice | Navigating Climate Challenges: The Strategic Role of Brokers in Risk Management
The frequency of severe weather incidents is increasing at an accelerated pace with infrastructure worth billions of rands continuing to be destroyed. Businesses are grappling with substantial financial losses, as they contend with soaring operational costs to maintain their operations and keep their doors open. This trend is evident in recent natural catastrophes, such as the 2017 Western Cape wildfires, the April 2022 KwaZulu-Natal (KZN) floods, and significant flooding in the Western Cape and along the Orange and Vaal Rivers in 2023. Climate change has become not only a social risk but also one of the biggest financial risks, impacting the national economy. While insurance cover has traditionally served as a safeguard for businesses facing losses from severe weather incidents, there are now emerging concerns and warning signs that could be alarming for businesses. Complex challenges The increasing occurrence and intensity of climate-related risks present companies with a new set of dynamic and complex challenges. As a result of the diminishing appetite of reinsurers to take on specific risks, particularly in regions prone to sever weather events, insurers are finding themselves shouldering a greater portion of the risks compared to the past, leading to a corresponding reduction in their risk appetite. This, in turn, directly impacts businesses. In the past, there were instances where insurers may have been lenient in terms of risk requirements, and in some cases even allowing clients to be non-compliant with a punitive excess. However, we are now observing instances where insurers are steadfast in their insistence on risk prevention measures, with little or no room for negotiation. While this is a prudent approach for insurers to appropriately manage risks, it carries significant and far-reaching financial implications for businesses. This was echoed by findings from a global customer survey, “The Value of Insurance in a Changing Risk Landscape,” that reveals insurance clients across the world’s six largest insurance markets are concerned about future insurability. Over 50% of respondents expect it will become more difficult or impossible to get insurance for natural catastrophes. Non-traditional risk management solutions needed As climate risks intensify, systemic risk grows, posing challenges to the conventional insurance business model. This could result in elevated premiums, rendering insurance either prohibitively expensive or, worse yet, inaccessible. It is our belief that the risk management landscape will undergo a profound transformation, with brokers assuming a central role in safeguarding businesses beyond merely securing appropriate insurance products but in proactively identifying and assisting with non-traditional risk management solutions. It is essential for brokers to provide services that go beyond conventional risk transfer, and incorporate elements such as risk prediction and prevention. Through leveraging their expertise to deliver comprehensive services addressing risk mitigation and fostering positive change, brokers can guide clients in developing robust risk management strategies to ensure uninterrupted business continuity.
Business Advice | Bridging the Gap: The Vital Role of Skilled Brokers in Cyber Insurance
Cybercrime has become one of the biggest risks to business continuity in South Africa yet many businesses are operating without the necessary cyber insurance policies in place, exposing themselves and their clients to significant financial and reputational losses. The reason why some businesses opt not to add cyber insurance cover to their portfolios might however come as a surprise to many. Obtaining cyber insurance can be a tedious and complex procedure for businesses, as it entails submission of a substantial volume of documentation necessary for insurers to assess and underwrite the associated risks. As a broker, in our experience, cyber cover is not the easiest cover to obtain for clients. Whilst we acknowledge and respect that insurers need to accurately underwrite risks, we also believe they should assist businesses in making this cover attainable. What type of insurance do you need? The type of insurance a company needs depends on the risk exposures relative to that particular business. The specifics of what is and is not covered by a policy will largely depend on the insurance provider, but across the board underwriters will review a company’s security protocols. This evaluation will encompass an assessment of preventative measures in place, such as email security, multi-factor authentication status, backup procedures, encryption, firewalls, and user training and awareness. It’s here where a broker plays a vital role in being the intermediary between the client and the insurer and especially assisting clients to provide all the required information to the insurers. The difference between cyber security and cyber insurance Another trend that we have identified is that some businesses confuse cyber security and cyber insurance. Cyber security refers to the proactive technologies, processes and practices aimed at protecting a company’s network, encompassing tools such as firewalls, antispyware software and Virtual Private Networks (VPNs). Cyber insurance helps cover the expenses and services a company needs after suffering a data breach or cyberattack. There are various cyber insurance cover options in the market including security and privacy liability, data recovery and loss of income, business interruption and loss of business income. Some cover options also include cover for legal expenses, a PR campaign to mitigate any reputational or brand damage, credit monitoring services, forensic auditors, customer notification costs, crisis management expenses, and costs in negotiating with hackers or paying ransom demands. Every business needs a cyber insurance policy One thing that can’t be denied is that every business needs a cyber insurance policy. According to Interpol’s 2022 Africa Cyberthreat Assessment report, South Africa leads the continent in the number of cybersecurity threats, with 230 million threat detections identified in 2022. South Africa saw a 100% increase in mobile banking application fraud and is estimated to suffer 577 malware attacks an hour. The concerning rise in cybersecurity crimes serves as a clear indication of a shifting risk landscape and highlights the need for knowledgeable brokers to educate businesses about the necessity and importance of integrating cyber cover into their insurance portfolios. Forge strong relationships with a trusted broker A skilled broker plays a crucial role in explaining the importance of cyber insurance to their clients. They bridge the gap between a business’s perception of their current cyber protection and the actual cover provided by a particular cyber policy, whilst also highlighting the comprehensive value such a policy offers. By forging strong relationships with a trusted broker, businesses can navigate the intricacies of risk management with confidence, knowing they have a dedicated partner who understands their unique needs and can offer tailored solutions for mitigating risks and ensuring uninterrupted business continuity.
Car Advice | Will increasing crime and resultant claims frequency lead to unaffordable vehicle insurance?
Whilst you might think that having a car with the latest high-end security features protects you, this is not necessarily the case as car thieves have become increasingly tech-savvy. Most modern cars include data aggregation systems such as Advanced Driver Assistance Systems (ADAS), On-Board Diagnostics (OBD) and telematics systems. These systems collect, combine, and manage various types of data generated within a vehicle. The very sensors, computers, and systems that were created to protect cars are now being used to steal cars. Advanced criminal techniques The Electronic Control Modules (ECMs) allow remote management of the engine, transmission, powertrain, brakes and suspension. However, criminals are now using this to their advantage to steal cars by using various hacking techniques to track a car’s credentials and data via the internet in order to gain unauthorised access and control over the vehicle. This allows them to bypass security, track the exact location of the vehicle, and create a false key signal, allowing them to easily gain access to the car. Keyless-entry systems This development in ways of stealing cars stemmed from the popular method of hacking a vehicle’s keyless-entry system (KES). This technique has become so popular among car thieves that leading vehicle manufacturers have created several enhanced safety upgrades specifically for vehicles in South Africa to reduce the chances of their KES being compromised, such as: Advanced Key Fob Encryption, Signal Blocking, Keyless Entry Deactivation and PIN or Biometric Authentication. Keyless cars are often stolen through a technique known as relay hacking. This involves criminals intercepting the signal from the original key and transmitting it to a second person who is closer to the car and holding a relay box. The relay box then sends a message to the vehicle that the key is nearby, causing it to unlock and start. Additional safety measures Insurers have identified several vehicles as common targets for this type of crime, and to counteract the increased losses on especially high-end vehicles, some insurers have stipulated that motorists should install up to two insurer-approved tracking devices as an additional safety measure. In these cases, it is essential for policy holders to ensure that their tracking systems are installed by the due date, are fully operational at all times, are tested regularly, and that their monthly fees are up to date in order to avoid their claims being rejected if an unexpected issue should occur. With the necessary tracking devices installed, some insurers waive the payment of an excess in case of theft or hijacking or give the customer a premium discount. Proactively predict to prevent potential losses It is important that consumers protect themselves and take the necessary precautions to prevent falling victim to vehicle theft and its associated risks. Seeking the advice of a broker holds significant value. The profound inconvenience, emotional distress, and subsequent expenses incurred in cases of hijacking or theft underscore this importance. Striving to proactively predict and prevent potential losses is of paramount importance. A primary issue within the industry revolves around addressing the widespread theft of vehicles, particularly high-end vehicles. The increase in theft of high-value vehicles can have a direct impact on the future affordability of car insurance in South Africa. One insurer reported an increase of 75% in the average value of a stolen vehicle claim. The associated claims settlement costs with such an increase is simply not sustainable in relation to premiums collected. Collaborative efforts required Tackling the prevalent theft of high-end vehicles necessitates collaborative efforts from all stakeholders. It is crucial that car and home insurance remains accessible and cost-effective for a broad spectrum of South Africans, to protect their hard-earned assets. It is advisable to consult your broker who will be able to provide you with appropriate recommendations for a suitable product to best suit your pocket and your needs.
Business Advice | Bird Flu Outbreak: The Urgent Need for Insurance Innovation to Safeguard Food Security
The current bird flu outbreak, described as one of the worst in South Africa, has had a profound impact on the poultry industry, posing significant threats to both the economy and the country's food security. The South African Poultry Association (SAPA) confirmed that the number of avian flu cases in South Africa this year is higher than in any year since the first outbreaks were reported in commercial farms in 2017. The Devastation of the Current Outbreak South African poultry farmers have warned of possible chicken and egg shortages with one poultry producer reporting a loss of almost two million chickens this year, worth more than R100 million because of the disease. The ripple effects of such losses extend far beyond the farms, threatening the transport industry, food security and our economy. A further pressing concern that needs to be addressed is that of appropriate insurance cover for poultry farmers caught in this predicament. Current Scope of Cover One might assume that insurance could provide a lifeline for poultry farmers in such dire circumstances. However, the reality is quite different. When it comes to insurance for poultry farmers, we typically look at two categories: fire and weather risks, and business interruption. Cover against fire and weather risks would coincide with damage or destruction of chicken houses. Business interruption covers these farmers against fixed expenses such as electricity and loss of profits after a devastating event such as a fire or extreme weather occurrence. The current scope of cover therefore leaves poultry farmers exposed and vulnerable as there is a noticeable absence of protection against pandemics like bird flu. The Controversial Question In the face of more frequent bird flu outbreaks, it begs the question: Why hasn't the South African insurance industry shown innovation by providing cover against such pandemics? Other countries have successfully found solutions to address these challenges. For instance, British poultry company, Noble Foods, collaborated with NFU Mutual, an insurance company, to launch bird flu insurance schemes that provide business interruption cover after an outbreak. The Role of the Broker Amid this insurance gap, brokers play a crucial role in assisting poultry farmers during such outbreaks. While there might not be specific insurance products available to safeguard against pandemics like bird flu, brokers help farmers constantly assess their cover and risk exposure. This guidance can prove invaluable in navigating the complexities of the insurance landscape during times of crisis. As the South African poultry industry grapples with the devastating impact of the bird flu outbreak, it is essential to re-evaluate insurance policies and consider innovative solutions that can protect farmers, ensure food security and safeguard our economy.
Home Advice | Risk management in alternate power solutions
South Africa's energy crisis has led to a surge in the adoption of alternate power solutions such as solar panels and backup power systems. While these innovations offer relief from frequent power outages, there are potential hazards that consumers need to be aware of as well as the insurance cover implications thereof. As more residents and businesses embrace these power alternatives, it becomes crucial to understand and mitigate the associated risks. Exponential growth in solar installations The installation of domestic solar panels has seen exponential growth over the past year. In March 2022, only 983.1MW of domestic solar panels were installed. Just four months later, by July 2022, the number had more than doubled to 2264MW. By June this year, Eskom advised that the figure had nearly doubled again, reaching 4411.5MW. Rise in risks The increase in alternate power solutions has resulted in a rise in the number of fire-related incidents, further highlighting the associated risks. Some of these incidents include fires at residential and commercial properties, arcing of wires on solar panels, and overheating battery banks. Alternative power solutions experts advise that fires involving lithium-ion batteries can be extremely dangerous as they release flammable, toxic gases that can trigger fast-spreading fire that is difficult to extinguish. The risk of battery re-ignition poses additional challenges, as the fire can trigger thermal runaway and spread to other battery cells, exacerbating the situation. Installing proper protection measures, such as correctly-sized over-current protection devises and surge protectors is advisable. Legal requirements To ensure insurance coverage for your installation, consumers should, by law, only work with approved specialists who will provide a Certificate of Compliance (COC). When installing solar panels ask the approved specialist to ensure that all roof tiles are properly closed up again to minimise water leaks and resultant roof damages in the future. The solar system should never rest directly on the tiles as this might cause your roof to sag over a period of time and should always rest on a properly installed framework fastened to the inside beams. A further legal requirement states that solar panels should be installed no less than 100mm above the roof tile and that property owners are responsible for acquiring a structural engineer’s certificate for the solar roof installation stating that the structural integrity of the roof is sound. Ensure you are adequately insured Insurance cover for alternate power solutions requires careful consideration. End-of-life replacement costs for batteries typically fall on the policyholder. Ensure the insurance product you choose includes cover against your most likely risks such as theft and hail. It is advisable to consult your broker and evaluate the available options to ensure you are adequately insured. While the surge in adoption of alternate power solutions offers an opportunity for consumers to achieve energy independence, it is equally vital to acknowledge and address the potential risks associated with these innovations. Safeguarding life and property requires a proactive approach to risk management and insurance planning, ensuring that the benefits of alternate power are harnessed responsibly and securely. By taking a proactive approach to insurance planning, consumers can embrace the benefits of alternate power solutions while minimising potential financial risks.
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