MSTI Namibia understands the difficulty many of our commercial clients are
experiencing due to the Covid-19 pandemic and we will support our clients
Over the past few years, Namibia has experienced various “disasters” that
negatively impacted specific sectors, some more than others. First it was the
construction industry in 2018, then the drought throughout 2018 & 2019 and
now Covid-19 in 2020.
When the construction industry almost collapsed, we helped issue
“Performance Guarantees” without collateral to help our contractors with cash
flow. During the severe drought, we paid the December premiums back to all our
farming clients. Covid-19 will be no different, as we will look at where we can
help to adhere to our client-centric approach of “what matters to you, matters to
After discussions with a leading bank, we have put in place a “Premium Bridging
Solution” for a bridged period (of say 6 to 12 months) to help our commercial
clients that are experiencing cash flow issues due to the current circumstances.
This solution will be provided after brokers, in conjunction with our
underwriters, have analysed the risk and assisted clients to adjust their cover, so
that there is sufficient protection in place for catastrophic events that could
threaten the business's survival.
However, if we listen to the economists, it can take much longer for economic
activities to normalize again and depending on the industry in which the
company is operating in, it may take months, even years to recover. If we all are
not going to help medium and small size businesses now, many will
unfortunately close their doors.
In our discussions with reinsurers and other stakeholders, it is obvious that the
solution is not necessarily to give “carte-blanche” postponement of premium
payments or premium holidays, as it will unfortunately negatively affect other
policyholders. We need to keep in mind that the risk-spreading mechanism
(reinsurance and retro sessions among reinsurers) is complex.
We are negotiating with all stakeholders (reinsurers included) to see how we can
help, but as reinsurers do rightly ask, “who should be helped and who not?” as we
cannot allow the rest of the policy holders to be negatively influenced in these
What did evolve from these discussions is that brokers as risk advisors can make
the biggest impact. Depending on the business and classes of insurance,
insurance risks may decrease and cover and premiums can be adjusted
accordingly, at difficult economic times like what we are experiencing now.
We are in the process of assessing the impact on our business and the affect this
pandemic is going to have, as well as the material impact on insurers.
Although the tourism industry is especially hard hit, there are also other
businesses that reviewed their portfolios and adjusted their covers to reduce
insurance cost. As expected, most of the instructions are coming from Lodges /
Hotels, Restaurants, Tour guides, Hiring companies, Transport companies, Fleet
owners and distributers related to the tourism sector amongst others.
However, we are open to help where we can, but unfortunately not all clients will
qualify and the following will be important considerations:
- The business prior to Covid-19
- Claims history
- Affected Industries etc.
- Ability to repay later
So please engage with us should your client need assistance.
CEO Momentum Short Term Insurance