South Africa’s largest short-term insurer, Santam, has announced that it will make R200 million available as COVID-19 relief to help clients, suppliers, and contribute to the government’s Solidarity Fund.
R135 million will go towards helping qualifying Santam clients in financial difficulty with premium relief support over the next two months.
This includes both personal clients and Small, Medium and Macro Enterprises.
The insurer says cover will remain fully in place during this period and all valid claims will be honoured.
In a statement, the company says it will also make a R10 million contribution to the government’s Solidarity Fund while another R10 million will fund various Corporate Social Investment initiatives to assist health workers and other essential service employees.
Santam says over the lockdown period, those employees who normally earn commission or sales-based income will be paid an average of their past three months’ earnings, to lessen the income impact.
In addition, the company will be proceeding with planned annual salary increases during April 2020 and is committed to retaining jobs.
Santam is the latest among those who have responded to the government’s appeal to help lessen the economic pain that especially the poorest South Africans will feel as a result of the pandemic.
In the video below, SABC News reports government’s Solidarity Fund sees an influx of donations:
Meanwhile, ratings agencies Fitch and Moody’s have downgraded the credit ratings of major banks. The move was expected after Moody’s became the last agency to cut South Africa to junk status last week.
In a statement Fitch and Moody’s downgraded South African lenders’ ratings to ‘BB’ and ‘Baa3’, respectively with a negative outlook, meaning the lenders are no longer considered investment-grade and they risk further downgrades.
The agencies said Standard Bank, Absa, FirstRand, Nedbank and Investec’s fortunes were tied to the deteriorating economy in South Africa. The economic recession, the coronavirus pandemic and the 21-day nationwide lockdown were cited as key factors, with banks expected to see rising bad debts and lower revenues. – Additional reporting by Reuters