Violent Protests made Insurance Companies go Bankrupt
Violent Protests made Insurance Companies go Bankrupt: Insurance companies work on the premise that they would help cover costs and expenses in case of accidents. The money paid as premium is accumulated in a pool combined with that paid by other insurers. This pool of money is invested in carefully considered ventures that are predicted to be profitable. When and if a claim is filed, the money to fill that comes from this pool.
Needless to say, the company is hopeful that the insurers are not involved in accidents and thus no amount needs to be paid out. Also, almost no company would ever be banking on the possibility of a ton of people suddenly demanding claims which is only ever the case with natural disasters.
These situations can thus tax insurance companies quite heavily causing a vast drain on their resources and might even force them into bankruptcy. It is thus safe to say that insurance companies pay the price of violent protests.
Effect of violent protests on insurance companies
South Africa’s present day condition is a perfect portrayal of the effect of violent protests on insurance companies. The South African Special Risks Insurance Association (Sasria) is the country’s only insurance company that provides insurance against special risks. The company does not offer its own insurance policies but works as an optional add-on insurance cover as it builds its cover on insurance policies offered by other companies.
It is a well-known bit of trivia that South Africa is a troubled country, plagued with violent protests. With these protests comes a lot of damage being rendered to property and the like. More than often, the damage is borne by innocent civilians. The good news here is that people have learnt that insurance is absolutely necessary. It is not a luxury to be availed if they want, rather it helps them get back on their feet when damage has been inflicted, and thus they avail insurance policies.
However, this means trouble for the insurance companies such as Sasria which has had to pay up to a total value of R766 million according to some reports. Sasria is a living example of how insurance companies pay the price of violent protests.
For More Information & Videos Subscribe To Our YouTube Channel