Ricochet News

How the plummeting rand impacts your insurance

How the plummeting rand impacts your insurance

The past week has seen many of us holding our breath as we witnessed the rand plunge against the US dollar, the Euro, and the British Pound. Jan Drahota, Executive Director: Business and Specialist Insurances at Indwe Risk Services says that over the past eighteen months, the depreciation is in the region of 35%. That’s a significant figure and one that should make us all sit up and take notice.

The fall of the rand affects many aspects of life, and one of them is the replacement values of insured property. As Drahota points out, “Those who import plant and equipment, raw materials or stock in trade from outside South Africa need to urgently review their insured values.”

This also applies to those who, while they purchase raw materials or commodities (for example, plastics, polymers, certain metals and alloys) in South Africa, the prices are set on international markets and linked to the US dollar.

Drahota adds that increasing your insured values correctly will not necessarily result in a proportionate increase in your premiums, “If you are exporting to countries outside of South Africa or perform services for companies domiciled abroad, we strongly recommend that you review your legal liabilities as well.”

Don’t adopt a wait and see attitude, speak to your insurance advisor sooner rather than later and find out more about the impact of the rand’s movements on your insurance portfolio. Guidance from a professional advisor can make all the difference when it comes to assessing the impact of currency fluctuations on your assets.

Drahota concludes, “The rand looks set to remain vulnerable – do the necessary now so that you won’t have regrets in the future.”