'I got into insurance by accident': Sasria CEO shares his career journey and SA's unrest risk outlook

'It has been a journey to get here' - that's the lead-in for the LinkedIn bio of Mpumi Tyikwe, now the CEO of the South African Special Risks Insurance Association (Sasria).

The state-owned entity provides insurance for special risks such as civil unrest, strike action and terrorism.

Tyikwe shares with Stephen Grootes how he started his highly successful career in this field 'by accident'.

Raised in Mdantsane just outside East London - which he describes proudly as South Africa's second largest township, Tyikwe managed to get into the University of the Witwatersrand during the turbulent 80s, when black students needed a permit from the minister.

This feat he achieved with a bursary from Anglo American - At the time Anglo was on a mission to develop black talent and, given its financial muscle in SA, it was able to do these things'.

Tyikwe was one of 12 students chosen to study engineering, but flunked out two years into his studies.

"Come 1985, I fail, and I don't tell my parents and then my first son was on the way and I'm turning 21 years of age... so I had to look for a job."

As it happens, there was an insurance company called General Accident just up the road, and the now bursary-less young man approached them for a job.

"The HR lady, God bless her soul, she just laughed and laughed, but said 'even though you failed, if you've done engineering at Wits you must be pretty smart'.
So that's how my insurance career started - in flames, and almost 40 years later I'm the CEO of Sasria!"

One thing he's learned as a human being, Tyikwe says, is that you need people who believe in you and are willing to take a risk on you.

Since that first job in insurance, the Sasria CEO has held leadership roles at Santam, Standard Bank, Alexander Forbes, Land Bank Insurance Services and Constantia Risk & Insurance.

He joined Sasria in 2022, just a year after the devastating political violence (the 'Zuma riots') in KwaZulu-Natal and Gauteng, which changed the way the entity looks at insurance.

"I had to un-think everything I knew about insurance when I joined Sasria - because when you think about July 2021, it happened over ten days but destroyed everything that was built over 42 years... I'd spent most of my career in the short-term business where you basically react as quickly as things happen, and here you have to think 10-15 years down the line with regard to the future outlook - of course you can miss completely what the world would like in ten years, but hopefully you'll be close enough."

The outlook for South Africa in terms of risk insurance is worse now than it's ever been before, he says, considering the challenges the country faces.

RELATED: All the ingredients for riots are in place, warns Sasria CEO

While we're not unique in this sense, there are things peculiar to us, he says.

"We are seeing a rise of SRCCs ( Strikes, Riots and Civil Commotion Clauses) in this business all over the world - think of recent events in Tanzania, Madagascar, Nepal, Bangladesh..."

The factors he highlights raising South Africa's risk profile include the challenges faced at Eskom, water shedding in parts of the country, and the poor state of infrastructure in many metros.

"The population in those places is growing rapidly so the infrastructure is just not coping, and add to that poor maintenance of the infrastructure and you've got a recipe for disaster."

"We are responsible for creating these problems - we could have handled these situations with electricity and water, for instance, much better."

Add to this the growing number of young people who are unemployed, and it's a recipe for a major problem in the long term if nothing is done about it, he says.

Sasria increased its premiums in October, just one of the measures the BLA is taking to manage the prospect of increasing risk.

RELATED: Fort Hare University closes campuses as violent protests erupt: 'It's a historical build-up of several issues' - SASCO

Tyikwe cites the recent student unrest at the University of Fort Hare, where just one claim from one institution came in at R400 million.

"Place that in the context of a company that's doing about R5.8 billion turnover, of which about 12% you spend on buying reinsurance... so you've got this cost base and then this significant claim - it would take about four or five of those for you to be in an extremely stressful situation."

Scroll up to the audio player to listen to this in-depth interview with Mpumi Tyikwe