You have a successful restaurant in Stellenbosch and veld fires take everything, or a warehouse in Midrand where a hailstorm plummets through the roof. These scenes are not uncommon in South Africa. Increasingly extreme weather — the result of our geography and climate change — is causing disasters like these more often, not as remote possibilities but as actual events that change the economic landscape. Their financial ripple is everywhere, and business owners must account for it.
People often consider insurance a necessary expense — something we hope never to use. However, when disaster strikes, insurance is not overhead; it is a financial lifeline to recovery that keeps jobs and economies stable. We’ve observed this pattern at Bryte, and the numbers tell a compelling story about the actual economic value of being adequately covered.
The Stark Reality of South Africa’s Protection Gap
South Africa is 86% underinsured — nine out of ten rand in disaster losses are not insured. The KwaZulu-Natal floods in April 2022 caused R54 billion in damages. Only half of that was insured; the rest fell on government budgets, taxpayers, and the thousands of businesses now faced with rebuilding their futures unaided.
And this is not a one-off situation. In 2024, heavy rains and floods led to the tragic deaths of 14 people, thousands were displaced, and roadways and bridges were destroyed in the Eastern Cape, which reported infrastructure damage of over R4.5 billion. Many of those losses were not covered by insurance. The devastation is felt by the state and by the most vulnerable communities, which are least able to bounce back.
This protection gap affects everyone: businesses, households, municipalities, and even the national treasury. If we let nine out of ten disaster rand go unserved, we undermine our ability to recover — from the ground up.
A Geography at Risk
South Africa’s geography and climate make us particularly vulnerable. In the Western Cape, wildfires can devastate years’ worth of agricultural investment and planning in hours. The “Day Zero” drought alone cost the region more than R5 billion and led to 25,000 job losses. These events underscore how quickly fortunes can turn, and why the right cover is so important for farmers, producers, and the broader agri-economy.
The Eastern Cape’s Nelson Mandela Bay Metro is heavily susceptible to flooding, which devastates informal settlements and disrupts port operations — major trade arteries for dozens of industries. On the Highveld, million-rand hailstorms continue to wreak violent damage. The worst Gauteng storm of November 2023 resulted in R35 million of insurance claims and close to R18 million paid out for vehicles alone. These case studies illustrate an urgent lesson: strong, tailored cover for farms, fleets, manufacturers — and every business affected by catastrophe — is essential.
Insurance and the Economy
Insurance goes beyond obtaining replacement, restoration, or compensation for lost or damaged property. It’s an economic engine that saves jobs, keeps supply chains working, and supports communities. In a disaster, business interruption cover pays wages, rent, and fixed costs, helping businesses get back on their feet. It means the coffee shop in Rosebank can keep its baristas, a wine farm in Paarl can retain its seasonal team, and freight companies in Durban can honour contracts even as they recoup losses.
When there is no significant cover, continuity fades and recovery is sluggish. Studies independently verify that insured businesses and households recover and return to profitability more quickly than those without insurance. The billions that insurers spend are not money lost to the ether; these funds circulate through wages, contracts, supplies, and rebuilding, supporting the industries that help South Africa thrive.
Tailored Cover for Each Sector
Every industry faces unique risks, so sector-specific insurance is vital:
Agriculture: Farms can succumb to drought, floods, or fire. Insurance enables farmers to replant, care for livestock, and keep rural economies viable.
Marine: Delayed or lost cargo disrupts supply chains. Marine insurance shields goods in transit, benefiting producers, sellers, and buyers.
Transport and fleets: Fleet and specialist motor insurance are crucial for logistics companies, enabling them to get back on the road and keep commerce flowing, especially during weather disruption.
Property & Body Corporate: Apartment blocks, shopping centres, and municipalities are covered with sectional title and commercial buildings cover, easing the burden of recovery costs.
Classic cars and specialist assets: Classic car insurance underpins a lively specialist economy, protecting collectors, suppliers, and events from financial loss.
Evidence from the Field
Consider the Markman industrial zone in Gqeberha. Uninsured businesses shut down after flooding, which resulted in lost wages and eroded infrastructure. Those with coverage kept their staff paid and their doors open, not only fending off the blow to their own finances but also helping to prop up the entire local economy against collapse. Insurance for large mining, manufacturing, and other major employers is more than financial protection — these companies are often the lifeblood of entire communities.
A Partner to Government
Businesses that are well insured take the weight off the government. With a diminished need for the government to bail out uninsured businesses, the Treasury is free to concentrate on rebuilding core infrastructure and providing those most in need with assistance. South Africa's Disaster Risk Financing Strategy for 2024 underscores the importance: increasing coverage enhances national resilience and eases the strain on scarce public resources.
Recovery Confidence
Insurance delivers “recovery confidence.” When communities and businesses feel safe and secure, they invest, innovate, and grow. The advantages are evident: a Gauteng manufacturing business expanding into the Western Cape with total cover; or a wine farm in Paarl planting new fields, knowing its agriculture cover is sound. Insurance powers investment, jobs, and resilience at all levels.
Adapting to Climate Change
Increasing weather volatility — flash floods in KwaZulu-Natal and Eastern Cape, hailstorms in Gauteng, wildfires in the Western Cape — calls for innovation. Bryte is continuously evolving. Through our Underwriting Manager Agency partnerships, we offer advanced crop insurance, rapid wildfire containment funds, and comprehensive motor insurance for collector and daily vehicles. This allows South Africa’s diverse business and personal landscape to continue functioning and flourishing, no matter the risk.
More Than a Cost: An Investment
The impact of insurance isn’t simply on profits today; it’s about lasting profitability and ongoing resilience. With the right cover, disaster recovery fuels economic activity, saves jobs, maintains stability, and provides a bridge towards long-term growth.
Agricultural insurance to protect rural livelihoods, marine and commercial policies to support trade and operations, and tailored solutions keeping sectors alive — insurance is no longer just an overhead but a cornerstone of South Africa’s economy.
The choice is clear: retain an overwhelming protection gap, letting businesses and families suffer unnecessary hardship, or recognise insurance for what it truly is: a pathway to a stronger and more prosperous South Africa.