A January 2024 article published by the University of KwaZulu-Natal suggests that South Africa has seen a 60% increase in extreme weather events over the past two decades. This is Part 1 of a two-part series.
Funeka Ngewu, executive head of claims & procurement at Momentum Insure. Supplied by Momentum Insure.
With extreme weather events like floods, droughts, and storms becoming increasingly common, the South African Weather Service (SAWS) recently highlighted the public’s struggle to interpret weather warning levels, which results in loss of property and lives.
Funeka Ngewu, executive head of claims and procurement at Momentum Insure says this has a direct impact on insurance – an industry working hard to understand the changing nature of weather risk and how to protect people from unexpected loss.
Insights from Deloitte’s 2025 global insurance outlook: Evolving industry operating models to build the future of insurance, revealed that in 2023, global economic losses due to natural catastrophes reached approximately USD357 billion. Only 35% of these losses were insured, leaving a protection gap of around 65%. The data found this gap to be particularly large in Africa. Ngewu cites this as a primary reason the insurance industry must continue to evolve.
“The increasing frequency of climate-related incidents has forced the insurance industry to re-think how it understands and assesses risk, to firstly provide cover that is more reliable, accessible and resilient and secondly, to maintain trust with the clients it serves,” says Ngewu.
She added that South Africa’s insurance sector is under increasing pressure to comply with guidelines promoting sustainable underwriting and disaster recovery. “Adjusting premiums, refining cover options to reflect the heightened risks, and ensuring we remain accessible to those clients most affected, creates a complex environment for insurers,” Ngewu says.
Harnessing data for better risk management
Insurers are increasingly turning to data-driven solutions to manage climate risks. Vast datasets and AI-driven insights are enabling the car and home insurer to better understand the likelihood of extreme events and craft underwriting policies that are both responsive and resilient.
“Data analytics allow us to forecast risks with greater accuracy, ensuring we can act pre-emptively, not reactively,” says Ngewu.
By predicting the frequency of events like severe storms or droughts, Ngewu says it is easier for the insurance industry to adjust premiums and design cover that reflects actual, and evolving risks because of the insights-led decision-making process that is being more widely utilised. She says insurers are increasingly utilising technologies like the Internet of Things (IoT), machine learning, and AI to enhance risk assessment and management.
For instance, IoT devices can monitor real-time data on weather conditions, property vulnerabilities, and even consumer behaviour.
Source: Momentum Insure
