By Neptal Khoza, Head Market Development at Santam
A society’s ability to “bounce back” after disaster, also called resilience, is linked to the size of its risk protection gap (RPG). On the risk exposure side, disaster risk preparedness and loss mitigation strategies are important, while access to risk solutions are critical ingredients for protection. When you have a combination of these factors, you build resilience. It is this resilience that provides a society with the capability to respond and the capacity to recover quickly after losses are realised following natural catastrophes and other man-made disasters. Insurance plays an important role in realising this triple dividend of resilience, most visibly in helping economies bounce back on their journey to growth. Furthermore, the success in reducing the RPG is dependent on prioritising the importance of public-private partnerships for risk management, resilience-building activities, and innovative risk solutions.
The climate-change-related issues South Africa faces mean more insurers are likely to be judged by the steps they take to limit the impact of climate change, not just by the plans they present. More insurers will, therefore, need to adapt to emerging climate change-related risks and, in partnership with other role players, lead efforts to address the impact of climate change. For example, Santam, a subsidiary of Sanlam has introduced a Partnership for Risk and Resilience (P4RR) programme, which aims to assist South African communities with becoming more resilient to disasters triggered by natural hazards. The establishment of the P4RR programme was in response to calls by the Ministry of Cooperative Governance and Traditional Affairs for businesses to partner with local government to enhance service delivery capabilities. The call resonated with Santam’s vision to narrow the Risk Protection Gap in the markets in which we operate, through collaborative, proactive risk management activities and the provision of reliable, comprehensive risk solutions.
Since the launch of the P4RR in 2012, Santam has reached 82 municipalities benefiting over 12.5 million people. This is one of many ways Santam advances the aspects of ESG additionality. On the ground there are tangible and visible impacts that extend far beyond the direct beneficiaries of the programme.
The primary goal of the P4RR programme is to proactively reduce risk and build capacity in municipalities and local communities. The main objective of the P4RR programme is to strengthen society’s resilience to disasters by building the institutional capacity of disaster management and fire departments in selected municipalities and major cities across the country.
Santam also contributes to developing climate change adaptation capabilities of selected municipalities in partnership with the Council for Scientific and Industrial Research (CSIR) using the Green Book as a basis for these interventions. Through this programme, Santam derives economic value through improved municipal capacity to manage risks and exposures in the targeted areas. To improve ownership and sustainability of our interventions, Santam has aligned the implementation of the P4RR programme with the District Development Model.
The P4RR programme’s basket of interventions include:
- Early warning
- Climate change adaptation
- Capacity building
- Risk deduction
- Response and recovery
Santam also works with civil society organisations to provide relief support after major events and disasters. In collaboration with Gift of the Givers (GoG) and the South African Red Cross, we provided disaster relief following floods in Ladysmith and eThekwini respectively.
The ongoing drought in the Eastern Cape Province has led to acute water supply challenges, particularly in the Nelson Mandela Bay (NMB) Metro. These challenges threaten sustainable development and social stability in the region. The water scarcity challenge facing the city has potential to undermine effective firefighting efforts as these largely depends on immediate access to adequate and reliable water supplies.
Santam collaborated with the Eastern Cape Provincial Disaster Management Centre to support the Nelson Mandela Bay (NMB) Metro to implement several mitigation measures. Through this partnership, Santam has:
- provided water tanks and pumps to all nine (9) fire stations and 14 selected nursing homes in the metro.
- provided 180 firefighting foam tanks to the Metro to optimise water usage in firefighting operations.
- collaborated with Gift of the Givers (GoG) to revive two boreholes in NMB for a school and a regional hospital.
P4RR exemplifies a shared value initiative in that its impacts are beneficial to a wider range of stakeholders, including municipalities, community members and businesses, particularly the insurance sector. An independent study of Santam’s P4RR programme executed in 2022 revealed that over the last decade, Santam has made a positive contribution to disaster risk management and fire services in South Africa. These contributions include strengthening institutional capacity of governmental partners, forging of new cross-sectoral partnerships and modalities for stakeholder cooperation as well as prompting innovation in the sector. While the study found out that there is ample evidence that the P4RR programme components are yielding sustainable developmental outcomes and making an important contribution to building resilient communities in the country, it also acknowledged that the programme has catalysed significant improvements and engendered collective ownership to proactively reduce risks and build resilience in the face of increasing losses associated with climate change and variability.
The Sanlam ESG Barometer in partnership with Business Day was launched on 23 March. It is the first barometer in South Africa that assesses how JSE-listed companies are actively improving environmental and social outcomes in society through their activities. To view the results www.sanlamesgbarometer.co.za/report
 Risk protection gap is the difference between economic losses and insured losses.
Image source: supplied