The state of mining insurance in South Africa

The mining industry remains a cornerstone of South Africa’s economy contributing roughly 8% to the country's GDP, yet it faces an evolving risk landscape that demands increasingly adaptive insurance solutions to meet the sector’s ever-changing needs.

Market stabilisation and rate adjustments

The South African mining insurance market has experienced a challenging period of large losses in recent years. James Seach, Division Executive at GIB Mining says that competitive budgets are now driving insurers to prioritise well-managed accounts.

“This is to ensure insurer’s profit margins are maintained in an increasingly competitive environment,” he says “As mining companies adopt new operational strategies to remain resilient, insurers must adjust their models to align with shifting industry needs. This has led to a greater focus on comprehensive risk assessments, structured reinsurance programmes and diversified risk pools to mitigate exposure while maintaining affordability for clients,” Seach adds.

Capacity and underwriting trends

The South African mining insurance market remains healthy, with a degree of flexibility in underwriting and sufficient capacity available for high-performing, preferred risk categories. However, there is a strong emphasis on key risk management practices. Insurers are increasingly prioritising accurate valuations at the inception stage, driving demand for regular assessments.

Business Interruption declarations are facing stricter scrutiny, while engineering surveys and adherence to DMRE requirements remain critical. ESG considerations continue to be a major factor in new business decisions and renewals, alongside reputable third-party reporting of tailings and broader risk management evidence. Additionally, insurers maintain a strong focus on Hot Work risks.

Overall, the market is evolving with insurers adapting to new risks and market shifts while maintaining profitability and capacity.

Social inflation and liability risks

“A notable disruptor in the mining insurance sector is social inflation, which is driving up liability-related claim costs,” says Seach, pointing to recent insights highlighting factors such as aggressive legal tactics, increasing litigation and rising settlement values have exacerbated the situation.

“This shift is largely fuelled by changing societal attitudes, growing recognition of income inequalities, and a stronger public inclination to hold corporations accountable,” he says. “Insurers are factoring in these emerging trends to adjust their policies and risk models effectively.”

Additionally, the increasing impact of regulatory shifts cannot be ignored. Recent policy changes aimed at improving worker safety, community impact and environmental protection have introduced new liabilities for mining companies. This, adds Seach, has prompted insurers to refine coverage offerings that address potential legal challenges while ensuring compliance with stricter industry standards.

The future of mining insurance

With mounting global insurance pressures, South African insurers must strike a delicate balance between risk appetite and sustainable coverage offerings. Seach emphasises that proactive risk management, accurate valuations and compliance with regulatory and ESG standards will be key in ensuring the industry’s resilience.

“Looking ahead, insurers will likely have to adopt more innovative strategies to remain competitive. This includes developing tailored insurance solutions, integrating predictive analytics for better risk forecasting, and fostering stronger partnerships with mining companies to improve overall risk mitigation.”

As mining operations expand and risks become more complex, insurers that embrace innovation, adaptability, and strategic underwriting will be best positioned to navigate the evolving landscape of mining insurance in South Africa. A forward-thinking approach will not only protect mining operations but also drive long-term sustainability and economic growth for the sector.