South Africa unrest (July 2021)

On the night of July 7, 2021, Jacob Zuma handed himself in at Estcourt prison to serve fifteen months for contempt of court. Two days later, roads in KwaZulu-Natal were blocked, then shopping malls in Durban and Pietermaritzburg were looted, and the unrest spread to Gauteng. About 350 people died in roughly ten days. President Ramaphosa spoke of an attempted insurrection, a word that would have opened an exclusion fight under a Lloyd's political violence policy. In South Africa the issue does not arise that way, because riot, strike and terrorism risk is carved out of every private property policy and sold by SASRIA, a state-owned insurer, through the market's insurers. The whole loss therefore fell on a single entity: about 32 billion rand in claims, for an insurer whose capital covered only a fraction of that. The Treasury injected about 22 billion rand, and SASRIA had to rebuild its reinsurance at the next renewal, on harder terms. Policyholders then saw a lower limit, for property damage and business interruption alike, and more exclusions. For the political violence underwriter, the case is a yardstick for riot accumulation in an emerging market: two provinces in one week produced a multiple of the worst losses seen before. One caveat: the monopoly probably kept the private market from breaking apart, since it could not have absorbed a loss of that size on its own.

• Constitutional Court of South Africa, Secretary of the Judicial Commission of Inquiry into State Capture v Zuma [2021] ZACC 18, 29 June 2021