Santam: ‘Please look into our faces, see our pain’ – tourism boss. Business insurance scandal

Santam has paid out business relief to some of its policyholders, but it is refusing to pay out for business interruption linked to Covid-19. Wynand du Toit, founder of Tented Adventures, has set out the human toll of Santam’s decision to play a tactical game to avoid paying claims from small business owners who thought they were covered for sudden revenue losses through no fault of their own. Du Toit says he is trying to keep his business on life support until the lockdown is lifted and tourists can return. For now, only locals are allowed to stay – but realistically they aren’t going to want a holiday next door. Du Toit says that Unemployment Insurance Fund pay-outs have helped his team members survive in the short-term and he used the relief to pay back some small businesses that were owed money. Du Toit’s business is among about 600 going to court in September to fight insurers for business interruption pay-outs. – Jackie Cameron

An open letter to the board, executive management, and shareholders of Santam Insurance

The Board:

VP Khanyile* Independent non-executive chairman,

B Campbell* Independent non-executive director,

MD Fandeso* Independent Non-executive director,

L Lambrechts** Chief Executive Officer,

MLD Marole* Independent non-executive director,

HD Nel** Chief financial officer, executive director,

MJ Reyneke* Independent non-executive director,

PE Speckmann* Independent non-executive director

The Senior Management Team:

Lizé Lambrechts, Chief Executive Officer,

Edward Gibbens, Executive Head: Commercial & Personal,

Kevin Wright, Executive Head: Operations & IT,

Ebrahim Asmal, Executive head: Claims & Group Sourcing,

Temba Mvusi, Executive Head: Market Development,

Mokaedi Dilotsotlhe, Executive Head: Brand Services,

Quinten Matthew, Executive Head: Specialist Business,

John Melville, Executive Head: Risk Services,

Hennie Nel, Chief Financial Officer,

René Otto, CEO MiWay,

Enid Lizamore, Executive Head: Human Resources,

Asher Grevler, Chief Risk Officer

And the SANTAM INSURANCE shareholders.

Dear Board, Senior Management Team and Shareholders,

You may ask why I am addressing this letter to you all in your personal capacities and the simple answer is as follow:

This is my Tented Adventures family – Darrell, Jason, Obakeng, Carolyn, Marvellous, Angel, Khabohina, Nhlaluko, Thomas, Connie, Bennie, Suzan, Stephen, Themba, Lizette, Martha, Robert and our 147 dependants – and we are directly impacted by your decisions not to honour the agreement we had when you agreed to cover my business.

I am no lawyer, chartered accountant, actuary, I am just a passionate business owner in the most damaged industry in South Africa – Tourism.

I must have read and reread our agreement, yes all 125 pages of the Product: Tourism Section: Commercial Umbrella Liability Section (wording version number: 001/06/2016) document at least 20 times trying my best to understand how you came to the conclusion that we are not covered. This I must say is still unclear.

Our policy clearly shows the following cover:

  1. ITEM COVER – Gross profit Included
    1. Insured amount R6,600,000
    2.  Indemnity period (months) 6
    3. Gross profit basis Difference basis
    1. Cancellation of bookings Included
  1. Insured amount R10,000
    1. Contingent Business Interruption (CBI) Included
  1. Insured amount R3,300,000
  2. Radius (km) 50
  • Indemnity period (months) 6
  1. Extensions to other premises
    1. Prevention of access Included
    2. Insured amount R3,300,000
    3. Radius (km) 50

On your website you state – This is why business interruption cover should be seen as a vital part of a continuity plan for a business. It insures you against the loss of profits or revenue, to enable you to pay overheads, assisting a business to return to the same financial position it was in prior to the incident – in other words – it’s what helps a business get back on its feet. – and this I want you to understand, my reason for taking cover with you was based on this, enabling us to pay overheads and get back on our feet.

128 days without any revenue. A 128 days of making plans, using up all my savings, extending my personal overdraft and taking out a personal loan because our bank has no appetite in assisting us.

128 days of asking our creditors for assistance with payment relief and holidays, they themselves also small business owners having the same issues as we have. A 128 days of making plans to keep my Tented Adventures family fed and assuring them this to will pass and we will survive.

18 days, this is how long it took you to reject our claim. In 18 days, you made the decision that our cover that we trusted you with has no value.

18 days, this is how long it took you to decide on the future of my business, my family members, and my suppliers.

In the past 128 days I not only used up all our cash reserves (business and personal) to settle creditors, deposits received in advance by guests that booked with us but also borrowed more, begged more, made more plans, begged a lot more and ultimately became dependant, a burden on the State.

My business showed a minimum 10% year on year growth since 2016, we hosted close to 25,000 guests since opening and won several national awards in service excellence. We were forecasting a fantastic year with more than 3000 bed nights already secured by March 2020.

My business the past 4 years contributed nearly R 3,437,500 to conservation efforts; R 5,760,000 in rural community spend in salaries and benefits paid to our employees and their dependants; R 24,000,000 spend with small businesses by renting equipment, vehicles, buying stock and paying for services rendered.

My claim is not for my benefit, I am not going to deposit it into my personal account. My claim is to ensure my business survives, I can settle all our outstanding debt to our creditors, ensuring our employees receive a salary and secure their employment, again contribute to conservation, support our local businesses and help them survive.

My claim is to settle all the advanced bookings deposits with our guests that can no longer travel, this I am sure will go a long way for many of them.

My claim is to ensure we are no longer a burden to an already overburdened State.

I could no longer afford to pay my insurance premium from June 2020 onwards, not because I had an issue with SANTAM, because I no longer had funds, my bank account is empty – a bank account that never had any loans or overdrafts or defaults in 4 years, now frozen by the bank.

On the 7th July 2020 I received a notification from yourselves advising my cover is no longer in placed dating back to 1 June 2020 – this I also find interesting and not as per your policy document terms as I read it.

This week you announced a R 1,000,000,000 relief plan for companies with CBI cover and that you are basing it on 2 months at 70% value as you are aware of the burden most suffered in the first 2 months of lockdown.

Reading the fine print broke me, literally broke me. What I saw as a light at the end of the tunnel, a relief that could make it a bit better for those around me – employees, creditors, and guests – are no longer available to me. This all because I could no longer afford to pay you, not intentionally, purely because I had no more money, the bank account is empty.

Where is the cover you promised – “It insures you against the loss of profits or revenue, to enable you to pay overheads, assisting a business to return to the same financial position it was in prior to the incident – in other words – it’s what helps a business get back on its feet.”

Ms. Lambrechts, you and your senior management team and board must do the right thing, you have to honour our agreement, you have to settle our claims and you have to deliver on what your website states “For 100 years, Santam has been in the business of protecting South Africa’s most important assets and valuables. We look beyond the facts in front of us to think about the lives that lie behind them. That’s why when things go wrong, our clients know they’re with the insurer that makes it right. This is the Santam way. Good and proper then. Good and proper now. Good and proper always.

SANTAM, do the right thing, NOW!

Signed, Wynand du Toit, Founder of Tented Adventures, passionate tourism business owner.