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South African Car Insurance Crisis: Theft Epidemic Skyrockets Premiums, Insurers Demand Action

Published by
WIlliam Dube

The South African automobile insurance industry is grappling with soaring premiums due to the dramatic rise in high-value vehicle thefts in the country. This alarming trend has prompted insurers to consider measures such as disabling keyless entry systems and making tracking devices mandatory.

  1. South Africa faces a surge in high-value vehicle thefts, leading to significantly higher car insurance premiums.
  2. Insurers are considering measures like disabling keyless entry systems and making tracking devices mandatory to curb escalating premiums.
  3. Companies like Old Mutual advocate for compulsory installation of tracking devices, warning motorists of losing coverage if they fail to comply.

Outsurance CEO Marthinus Visser expressed concern over the impact of crime on insurance claims during a conversation with Business Times following the announcement of his company’s financial results for the six months ending December. Visser noted that the theft of high-value vehicles and 4x4s, particularly those with keyless entry systems, has significantly driven up the cost of insuring these automobiles.

Recent crime data reveals that there were 23,025 reported carjackings by the end of 2022, translating to a staggering average of 63 vehicles stolen per day. Gauteng, KwaZulu Natal (KZN), and the Western Cape were identified as the provinces with the highest incidences of hijackings.

Wahl Bartmann, the CEO of Fidelity services group, also commented on the high number of high-value vehicles and 4x4s being stolen. According to the group, Toyota models account for 31.6% of their reported incidents, making them the most frequently targeted vehicles in South Africa. Volkswagen (VW) and Ford follow closely behind, representing 14.1% and 10.4% of Fidelity’s reported incidents, respectively.

Fidelity ADT identified the following high-value 4×4 models as being at the highest risk of theft:

  • Toyota Prado
  • Toyota Landcruisers
  • Toyota Hilux
  • Ford Ranger
  • Toyota Fortuner
  • Nissan NP200

This surge in high-value vehicle thefts has significantly impacted Outsurance’s premiums, with the insurer reporting an 8.7% growth in gross written premiums. The widespread targeting of keyless entry models by theft syndicates has prompted insurers to explore solutions to curb the escalating premiums associated with these vehicles.

Visser highlighted potential measures such as tracking devices and even disabling keyless entry systems for vehicles equipped with the feature. He also emphasized the importance of using Faraday pouches – which block signals – to store vehicle keys after locking up, preventing criminals from intercepting the key’s signal.

Insurers, including Old Mutual, are now advocating for the compulsory installation of tracking devices, warning that motorists who fail to comply risk losing their insurance coverage. Old Mutual Insure and Elite Risk Acceptances have stipulated that approved early warning/active tracking devices be fitted to higher-risk vehicles covered under Commercial Lines, Agri, and Personal Lines policies. Vehicle owners are urged to install high-quality tracking devices before April 15, 2023.

The compulsory fitment of tracking devices applies to vehicles in the following provinces:

  • Gauteng
  • KwaZulu Natal
  • Limpopo
  • Free State
  • Mpumalanga
  • North-West

The directive does not apply to vehicles in the Western Cape, Eastern Cape, Northern Cape, Botswana, or Namibia. Although traditional tracking devices may be less effective than they once were, the insurance group maintains that they still offer an advantage in the early stages of theft and hijacking.

Insurers warn that policyholders who fail to comply with these requirements will no longer be covered for theft and hijacking. They remain committed to ensuring the safety and security of their customers and believe that taking drastic action is necessary given the current climate of sophisticated vehicle theft syndicates.

WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on william@rateweb.co.za

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Published by
WIlliam Dube

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