With climate change happening sooner than expected and summer these days bringing fire in the south of the country and excessive rain in the north, consumers are wondering more and more about how the damage will affect their short-term insurance. Ernest Eng, head of analytics, captives and risk finance at IMEA Marsh, says after last year’s destructive floods in KwaZulu-Natal (KZN), the growing intensity of the Western Cape’s fire season, and therecent floods in Limpopo and Mpumalanga, the potential for widespread disruption was once again front of mind as South Africa faced another spell of increasingly common severe weather and thunderstorm events at the start of December, followed by severe wildfires and more disastrous rain in January. “As theWestern Cape battles a ferocious start to the 2026 fire seasonand Gauteng prepares for heavy summer rainfall, this seasonal volatility is amplifying the impact of natural hazards and exposing a widening natural catastrophe (NatCat) risk protection gap.
“The destructive reality of this volatility was starkly evident in early January, when wildfires swept through the Cape Winelands and Franschhoek, destroying infrastructure and threatening farms. These blazes, which forced evacuations in coastal towns and led to major disruptions such as N2 road closures, serve as a potent reminder of the escalating risk landscape.” In the new report, Natural Hazards Risk and Climate Resilience: Preparing for the Next Disruption, the researchers found that while approximately 46% of global weather-related losses are typically insured, this resilience gap is far wider in South Africa, where over 70% of losses remain uninsured. Eng says this discrepancy means South African organisations face not just a gap, but potentially an ever increasing “resilience chasm” in the face of unabated global warming.
“This leaves many critically exposed to shocks similar to the devastating R54 billion losses seen during the 2022 KZN floods.” The NatCat risk protection gap is the difference between total economic losses caused by disasters and the insured losses that are actually recoverable. As climate volatility accelerates, this gap has evolved from a financial challenge into a structural threat to business resilience and long-term economic stability, Eng warns. “In the Western Cape, the fire season is starting earlier and burning hotter, particularly in areas where precipitation during the winter was lower than usual.
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High winds and extended dry periods are driving fires closer to urban edges, threatening commercial property as well as community infrastructure. “Fire risks are also noted to have increased in rural areas in areas of mixed agricultural land and grassland. Meanwhile, in Gauteng, heavy rainfall and flash floods are expected to increase pressure on drainage systems, transport networks and power grids, posing significant risks to supply chains and daily operations.” According to Marsh, a global company specialising in risk, strategy and people, these seasonal risks underscore the urgent need for proactive risk management. “Too often, organisations address risk reactively, which is financially unsustainable for the economy as a whole.
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