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In response to the 2018 Budget Speech, Santam, South Africa’s largest general insurer, has urged households to brace for another year of ‘belt tightening’ and consolidation of expenses.
Andrew Coutts, Santam Head of Intermediated Distribution, said in view of the tough economic times, South Africans, households and businesses, should when compiling their budgets take into account immediate needs and potential threats to one’s assets, safety and security.
“The 2018 Budget confirms that consumers are facing tougher economic times than ever, compelling households and businesses to implement expense consolidation measures according to their unique set of circumstances and financial priorities,” said Coutts.
“While managing tougher monthly expenses, it’s important to distinguish between different kinds of expenses, finding ways to get the most out of items that are considered recurring expenses,” he added.
While insurance is a monthly recurring expense, it is a critical area for affecting significant household savings. According to Coutts, high-value assets such vehicles and homes should remain high priority items in a budget, including insuring them.
“It is important to remember that when things go wrong, if insurance is not in place, it can be financially devastating on individuals or companies. If disasters strike, quality insurance is an important part of having the capacity to recover quickly,” Coutts added.
Households can realise significant savings if they follow these tips for their insurable assets:
Critically, it is important that the budget allocation for municipal infrastructure is maintained at appropriate levels, as it has a direct correlation with household and business finances.
“Household and business finances are significantly impacted by issues such as poor road maintenance, lack of policing, the non-enforcement of building regulations or municipal by-laws. These impact on risk and can directly influence insurance premiums. It is important therefore that appropriate levels of funding are maintained for this critical service-delivery function,” added Coutts.
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