Namibia: No Flood Cover for Mariental

| February 7, 2013 | 0 Comments

MARIENTAL has been served a double blow after Mutual and Federal suspended its flood insurance cover shortly before the start of the rainy season and the Ministry of Agriculture, Water and Forestry cancelled a tender to clear the reeds in the Fish River.

The last flood that struck the southern town was in February 2006 when insurance companies had to pay out flood-associated losses of more than N$100 million.

Properties in the western part of Mariental, downstream of the Hardap Dam and the lower Fish River, were flooded following heavy rains. This resulted in the suspension of flood insurance cover for the town’s residents.

However, six years later, in September last year, Mutual and Federal announced with great fanfare the reinstatement of insurance cover for the flood-prone areas at Mariental. This step was widely welcomed and many of the residents cancelled their short-term insurance at companies such as Hollard and Santam and joined Mutual and Federal at a higher premium to get flood cover.

This good news only lasted five months though, with Mutual and Federal announcing this week that flood cover in Mariental will not be available from March 1.

“All policies that have been endorsed providing such cover will now be endorsed with the flood exclusion with effect from March 1 2013,” said Mutual and Federal managing director Marcelina !Gaoses in a letter to all insurance intermediaries.

According to her the risk has been somewhat mitigated by various actions taken by the Mariental municipality, but the risk still poses a serious threat to the company’s balance sheet.

“She informed us at a stakeholders’ meeting this past Monday that in the absence of participation by other short-term insurers through risk sharing and adequate reinsurance coverage, Mutual and Federal cannot continue with the insurance of flood-prone areas at Mariental,” the chairman of the Mariental Flood Task Force, Chris Nel, told The Namibian.

He said after last year’s reinstatement of the flood insurance there was a temporary recovery of the town’s economy and banks started lending money again to start new businesses or to expand existing ones.

“There is an uneasiness among the Mariental residents with the cancellation of the flood insurance in the wake of the rainy season. This might also have a negative effect on the economy of the town, but we will continue to negotiate with all short-term insurance companies for flood coverage,” said Nel.

The chief executive officer of the Namibia Chamber of Commerce and Industry, (NCCI), Tarah Shaanika, expressed disappointment at Mutual and Federal’s decision.

He said it is risky for businesses at Mariental to operate without insurance and it makes the business environment at the town less conducive compared with other towns in Namibia.

“We would like the company to continue with the flood coverage. However, if a person did not claim for the past five months Mutual and Federal should consider refunding them for the premiums they have paid,” said Shaanika.

In the meantime the permanent secretary in the Ministry of Agriculture, Water and Forestry, Joseph Iita, has announced that the tender to clear reeds and to deepen and widen a section of the Fish River at Mariental has been cancelled.

“The distance of clearing and deepening the river is too long and thus too expensive. We don’t have the money to do it and therefore it was cancelled. The tender will again be re-advertised, but I cannot tell you when at this stage,” Iita told The Namibian.

The tender closed on November 13 last year and several applications were received from local contractors before the ministry cancelled it.

Culled from :Here

We enjoin our readers to send their stories/articles/reports, including pictures to



Category: Africa News