South African consumers and businesses should prepare themselves for a big increase in their car insurance premiums according to the South African Insurance Association’s (SAIA) chief executive, Viviene Pearson.<\/p>\n
Pearson noted that while junk status would have far-reaching consequences for every South African, the downgrade by Standard and Poor’s is expected to hit the short-term insurance industry in particular.<\/p>\n
“The cost of motor parts, which are mostly imported, will increase exponentially, which is likely to lead to increased repair costs followed by increased premiums for policyholders; over and above an already higher cost of living for consumers.<\/p>\n
\u201cThis could expose consumers to financial risks in the event of a loss or damage to assets. Furthermore\u201a motor body repairers building industry and others\u201a will feel the pinch of less work\u201a leading to job losses,” said Pearson.<\/p>\n
\u201cThis is all something that our country cannot afford at a time when the economy is growing at the slowest pace since the 2009 recession\u201a and with the official unemployment rate sitting at 27%.”<\/p>\n
Pearson concluded by asking that\u00a0all leaders in government, business, labour and civil society, work together to ensure a stable and sustainable political, social and economic environment for all South Africans.<\/p>\n