The insurance industry plays a crucial role in shaping societal resilience and sustainable development as opposed to their historic approach which has focused primarily on risk transfer.
As the world grapples with climate change, insurers are increasingly adopting social impact values, models and accountability measures that extend beyond traditional risk management, whilst others are simply taking many of us for a ride and want to pass the bill and the buck.
One has observed after underwriting and profiting from billions of dollars’ worth of fossil fuel expansion, the insurers that helped load the dice now want the public to foot the bill.
In April 2024 extreme weather events influenced by the La Niña weather phenomenon, ravaged over Kwa Zulu-Natal.
When the downpour finally ended, 535 people were killed and 40,000 people were displaced. 630 schools were affected in the KZN province in the impacted areas, and 124 schools damaged, thus impacting around 270,000 students over 4 000 homes and businesses were raised to the ground.
In 2023 Aon insurer’s Weather and Climate Catastrophe Insights report tallied damage at ~$3.6bn (R64,672bn), however 18% of losses were uninsured.
Three years later, the reckoning finally arrived in court. The invoice to account for this atrocity has landed in the high court for R6.4 billion, and it’s addressed to South African public.
The claimant is Tokio Marine & Nichido Fire insurance.
The Japanese insurer that covered Toyota’s prospection plant, after the floods caused a shutdown of the plant that stretched months. Now, using a legal precedent called Subrogation, the insurer is stepping into Toyota’s shoes to recover the costs – not from God himself, but from eThekwini municipality, the KwaZulu Natal Department of Transport and Transnet.
This isn’t an isolated claim. A second brought by insurer Caxton for R339 million and a third for by insurers for Corruseal Corrugated KZN for R540 million. All naming the three defendants and asking the same question, who pays?
Beyond passing the buck – the insurance sectors responsibility is sacrosanct
Fair enough, it’s not a hard sell for many South Africans to concede that the maintenance of municipal infrastructure has been delayed and deferred for so long, until maintenance plans are quietly abandoned.
The Umlaas Canal that was built to divert water uMlazi River around the Prospection industrial area, the diversion berm, the stormwater system — these are public assets, and there is a strong case that they were not maintained as they should have been.
The global insurance industry not only controls the pricing for climate risk, but insurers are also the silent partners of every coal plant, oil field, and gas pipeline. Not a drop of oil gets pumped without being underwritten.
The Insure our future coalition has fingered Tokio Marine as the most laggard among three major Japanese insurers.
This is an industry that earns its commission at the wellhead, loans the atmosphere with the consequences, delivers the externalities for curbside pick-up and then saddles you with the bill.
Read that carefully. Having underwritten the emissions, the industry now underwrites the offsets sold to cancel them.
And it writes the policy to shield Northern capital against the one thing that might interrupt the arrangement: a Southern government reclaiming sovereignty over its own land and air.
Let me submit that we have been led astray and flat out deceived.
The proverbial arsonist is selling firefighting services. He lights a match at the well and sell you the extinguisher.
When the house burns down regardless, he slides a bill for the water under your door.
He profits at the ignition, profits at the pretend cure and profit at the funeral, three turns of the wheel and he pins you every time.
Alani Morisette could not have penned a greater irony. “It’s the insurance claim that they just didn’t pay, and who would have figured?” It figures that publicly available evidence confirms that Tokio Marine has underwritten at least one of the carbon majors. Its own SEC filings Tokio Marine insurance products route policyholders' savings into the fossil major ExxonMobil among its top holdings.
When you stack this 6.5 billion claim up against the 8.5 billion in Just Transition Climate finance, the numbers just do not balance. Every cent spent on paying this claim is taking from resources that can build out our transmission grid, provide solar on the rooftops of indigent households create jobs in socio-economic zones.
This is a unique kind of colonialism; its authors have spent time refining it. It skips extraction and goes straight to the penalty. Between 2022 and 2024, developing countries paid out US$741 billion more in principal and interest on external debt than they received in new financing.
It is the landlords game played out on our turf. When you write the rules of the game you always win. It is time for South Africans to say, “The buck stops here.”
Thandie Zonke, is a Canon Collins Scholar, working at the intersection of climate justice, energy, and gender transformation, and a Commissioner of Presidential Climate Commission.
**The views expressed do not necessarily reflect the views of the National Media Group.