Climate Change Impact and Catastrophe Modelling in South Africa.

Navigating the Shift in Insurance Complexity Due to the Rising Tide of Floods and Droughts.

The insurance industry, alongside the clients we serve, has never been under such pressure as it is now with the South African climate nuances. The recent floods within KwaZulu-Natal, coupled with the persistent droughts witnessed in the Eastern Cape followed by the recent destruction in Mthatha, are more than just singular events. They signal a changing climate landscape that demands greater risk response.

Escaping the grips of panic-induced responses follows strategic insurance broking which, at Maksure Risk Solutions, we believe will become paramount in future resilience building.

KZN floods (2022 - 2024):

According to post-disaster assessments, widespread flooding in KwaZulu-Natal claimed hundreds of lives, displaced thousands, and caused infrastructure damage exceeding R62 billion. Insurers paid out close to R27 billion in claims, underscoring the escalating cost of climate inaction.

Eastern cape Droughts:

The relentless droughts continue to devastate agriculture coupled with already ravaged water infrastructures. Climate models for the future anticipate further reductions in rainfall increasing risks for food security within the rural economies.

Mthatha Floods (2025)
A recent cut-off low system led to catastrophic flooding, worsened by dam overflows and tributary surges. With over 90 lives lost and thousands of homes destroyed, this event exposed gaps in both preparedness and insurability.

Is the Insurance Industry Keeping Pace?

Not yet—but it must, and can—with the right partners.

The South African insurance market is grappling with a fundamental challenge: accurately quantifying and pricing climate risk.

• Outdated Risk Models
  Many underwriters still rely on historical loss data, which underestimates the frequency and intensity of today’s climate events. This leads to underpriced premiums, insufficient capital reserves, and ultimately, gaps in cover when disaster strikes.
• Regulatory Shifts
  The Prudential Authority has issued guidance requiring insurers to embed climate risk into governance, ORSA, and public disclosures. While necessary, compliance varies and implementation remains uneven.
• Reinsurance Pressures
  Escalating CAT claims have driven up reinsurance costs globally. This is squeezing margins and forcing tough decisions—absorb the risk or pass on the cost to policyholders?

The Broker Advantage: Turning Uncertainty into Strategic Advantage

This is where Maksure’s role as a specialist insurance and reinsurance broker is indispensable.

We don’t just place risk. We advocate, educate, and innovate on behalf of our clients, working alongside insurers, reinsurers, modellers, and regulators to shape proactive solutions that reflect today’s realities and tomorrow’s risks.

• We help clients navigate the complexity of CAT models, ensuring that risk exposure is not just understood but priced with precision.
• We advise on risk mitigation strategies—from parametric insurance and deductible structures to climate-resilient infrastructure cover.
• We forge global partnerships, tapping into the depth of Lloyd’s of London and other international markets to access capacity even in hardening conditions.
• We support regulatory readiness, helping clients and insurers alike align with emerging compliance frameworks for climate risk.

A Call to Action: From Reactive to Resilient

South Africa’s climate future is uncertain—but it is not unmanageable. The insurance industry, with brokers at the forefront, must accelerate its evolution from reactive protection to proactive risk planning.

At Maksure, we are committed to shaping this transformation. By embracing cutting-edge modelling, advising on climate-aligned products, and connecting clients to global expertise, we enable not just continuity—but competitiveness, even in crisis.

Climate change is real. Risk is rising. But with the right insurance broker, resilience is within reach.

Contact our team on Tel: 011 805 0086 or email info@maksure.co.za

About Maksure Risk Solutions

Maksure Risk Solutions is an Afro-Global independent specialist insurance and reinsurance broker with business footprint in Africa, Asia, East & Western Europe, South America and the Caribbean. We provide innovative and tailor-made risk solutions in Insurance and Reinsurance as well as Risk Financing and Actuarial Consulting geared towards capital management and strengthening our client’s balance sheet. Maksure is also one of the major players in Captive Management (Establishment & Management) in South Africa, Mauritius, Bermuda and various other jurisdictions. We have access into the Lloyds of London with a deep understanding of African markets. Our global nature ensures that our clients access quality capacity as well as some of the world’s latest thinking and solutions.