South Africa is experiencing a big shift in vehicle crime, with Santam’s commercial and personal lines claims confirming a “significant jump” in high-value vehicle hijackings and thefts.
According to claims data released by South Africa’s largest short-term insurer last week, high-value vehicle theft claims rose by 128% in commercial lines and by 92% in personal lines from 2021 to 2022. Vehicle hijacking claims were up by 32% in the latter category.
Commercial lines insurance includes property insurance products for businesses, while personal lines insurance covers individuals against loss. Santam’s 2023 Insurance Barometer released last week included an overview of evolving risk trends impacting both these lines. More than 900 consumers, businesses, and brokers from across the country were surveyed. These findings were combined with Santam’s own claims data to create the report.
Read: Top trends in the changing role of the modern insurance broker
Commenting on personal lines, Atang Matebesi, chief executive of Client Solutions at Santam, said consumers were being hit hard by high-value vehicle theft and hijacking.
“There were two major standout claims trends that developed in the personal lines insurance space over the past two years that required corrective actions. The most notable trend was the exponential escalation of power surge claims related to loadshedding, and second was for high-value vehicle hijacking and theft,” he said.
Read: Loadshedding takes centre stage in SA’s risk landscape
Unpacking the vehicle hijacking and theft claims, Matebesi said the increases were not because of a spike in the frequency of claims – that number tracked only slightly above the historical trend – but to the severity of each claim.
“Santam has seen a shift away from older, low-value vehicles with limited security requirements to more expensive double cabs and SUVs … Certain makes and models were up to 20 times more likely than similarly priced models to be hijacked or stolen, specifically in Gauteng,” he said.
The report disclosed that Santam received 53 claims in November 2022, and 68 claims in December for theft or hijacking of one particular vehicle make.
In the case of commercial lines, besides high-value SUVs, delivery vehicles also emerged as a desired target. In this category, Santam’s incurred claims for high theft-risk vehicles were 6.32 times higher in 2022 than the 2019 base measure, and more than double the incurred claims for 2021.
Other interesting patterns that emerged when reviewing the vehicle hijacking and theft statistics included a concentration of risks in areas that are close to border crossings, as well as a rise in thefts involving vehicles with keyless access. The report found that, in the former category, stolen vehicles had extended from Gauteng into areas of KwaZulu-Natal and Mpumalanga, “where they exit the country into African territory”.
Corrective action
According to the report, the motor insurance class remains, by far, the biggest contributor to premium in the South African short-term insurance market.
Andrew Coutts, the chief executive: Broker Solutions at Santam, said the loss experienced in 2022 because of car theft and hijacking was so severe that several corrective actions were needed to minimise exposure.
“Without applying stringent corrective actions, the alternative would have been to either exclude certain vehicles from cover entirely or increase premiums by 450%, which is simply not feasible,” Coutts said.
As outlined in the report, the actions taken to reduce claims to “acceptable levels” included doubling up on vehicle trackers, discussing tech-linked weaknesses with vehicle manufacturers, using Faraday pouches to prevent the cloning of keyless access signals, and working with law enforcement.
Attie Blaauw, the chief underwriting officer: Client Solutions at Santam, said insurers, including Santam, have been left with no choice but to introduce mandatory hijacking and theft countermeasures.
“While some insurers make it mandatory for all vehicles over a certain sum insured to have a device installed, Santam opted to act on a case-by-case basis and only require the installation of trackers based on the level of risk attached to specific vehicles and/or the insured’s geographic location.
“For example, an insured based in Gauteng driving one of the high-risk vehicles will be asked to install a tracker, while the requirement will not apply to a client in the Western Cape driving the same vehicle,” Blaauw said.
These corrective actions proved to be effective, Santam reported, with personal lines hijacking claims down by 24% for the first half of 2023, and theft by 19%.
“The tough corrective actions taken to address a significant spike in high-value vehicle hijacking and theft claims during 2022 illustrated the merit in keeping a close watch on claim trends, emerging risk themes, and societal behaviours,” said Thabiso Rulashe, the head: Strategy and Investor Relations at Santam.
