MAIN IMAGE: Cecil Madziwa – commercial client manager at Aon South Africa
Aon South Africa
From the thatched homes of the Cape Peninsula and southern suburbs, where areas such as Noordhoek and Constantia are known for them, to the lifestyle and bushveld estates of Gauteng and the North West around Hartbeespoort and the lowveld near the Kruger National Park, thatch remains one of the most recognisable features of the South African property landscape.
The Southern Cape and Garden Route sit at the heart of the industry, with much of the country’s thatching reed, or dekriet, grown and harvested in the winter-rainfall coastal belt around Albertinia.
For agents, thatch has long been a selling point, the mark of a home with character and a sense of place. Yet that same feature is fast becoming one of the toughest insurance risks on the market, and it is starting to shape what buyers can afford, what they can insure, and in some cases whether a sale holds together at all.
A combination of rising fire losses, changing climate conditions, and a tighter global reinsurance market has changed how insurers assess thatched properties. The result, on the ground, is steeper premiums, higher deductibles, and stricter underwriting, all of which feed directly into a buyer’s monthly costs and their ability to secure cover as a condition of a bond.
“Over the last few years, we’ve seen a pronounced tightening in appetite for thatch risks,” says Cecil Madziwa, commercial client manager at Aon South Africa. “Several insurers have reduced their capacity or withdrawn from this segment entirely. That leaves fewer markets competing for these risks, which has pushed premiums up and, in some cases, led to very challenging renewal terms.”
A changing risk landscape
Thatch has always carried a higher fire risk, but Madziwa says the operating environment has shifted over the past decade. More severe droughts, longer dry seasons, and frequent veld fires have increased both the likelihood and the severity of fires reaching thatched properties. Insurers have also recorded major fire losses at thatch-roofed properties, including those caused by lightning.
The financial impact, he notes, often runs well beyond the roof itself. “Even when buildings are not destroyed, the financial impact often extends well beyond structural repairs. Business interruption, guest relocations, cancellations, reputational damage, and specialist rebuilding costs can far exceed the initial fire damage,” Madziwa explains. For a residential seller, the equivalent exposure is the cost and time of a specialist rebuild, and the difficulty of insuring the property in the interim.
According to Madziwa, global reinsurers, which sit behind much of the local market, have grown more cautious, reducing underwriting capacity and adding to premium pressure. In practice, he says, insurers now assess a property as a whole rather than on a structure-by-structure basis, which is the level of detail agents most need to understand. A single lapa, entertainment area, or outbuilding with a thatch, reed, or tile-over-thatch roof can affect how the entire property is priced, even where the main dwelling is under tile.
He says the factors commonly assessed include the distance between thatched buildings and neighbouring structures, the amount of surrounding vegetation and proximity to open veld, the proportion of the total roof area that is thatch, existing fire prevention, detection, and suppression systems, and lightning protection and general site maintenance.
Risk management is becoming the difference
Cover based solely on the appearance and use of a property is being replaced by the expectation that owners proactively manage risk before favourable terms are offered. “Measures such as well-maintained fire breaks, vegetation management, compliant lightning protection systems, and comprehensive emergency response planning have become increasingly important,” Madziwa says. Larger properties, he adds, may also be expected to install dedicated fire-water storage, sprinkler systems, or fixed suppression systems.
Those investments come at a cost, and Madziwa acknowledges the difficult commercial decisions they force. For a seller, that can mean weighing the expense of upgrades against the drag that poor insurability places on price and marketability. For a buyer, it can mean factoring the same upgrades into an offer. Either way, it is a conversation that increasingly belongs on the table before an offer is signed rather than after.
Exploring alternative solutions
As traditional cover becomes more restrictive, Madziwa says some owners are looking at fibre thatch and alternative roofing systems that keep the visual appeal of traditional thatch while potentially improving fire performance. “Insurers remain cautious until sufficient local performance data and independent combustibility testing are available for specific products and installation methods,” he cautions, which means an alternative roof is not yet a guaranteed route to cheaper cover.
Others, particularly owners of larger properties, are considering alternative approaches to financing risk, including higher deductibles and self-insurance, to gain more flexibility as market conditions evolve.
Building long-term insurability
For larger portfolios, limited local capacity has pushed some risks into international markets, particularly London. Madziwa says this can open access to additional capacity, but usually comes with significantly higher deductibles, stricter underwriting, and more demanding risk-engineering expectations.
The conversation, he says, has moved from simply buying insurance to demonstrating why a property remains a quality, insurable risk. “With the right data and meaningful risk improvements, insurers do still want to support well-managed businesses,” he says. For agents, the practical takeaway is that a thatched property’s insurability is now part of its saleability, and the sellers and buyers best positioned are those who treat fire prevention, risk management, and specialist insurance advice as part of the transaction rather than an afterthought. Thatch is unlikely to disappear from the South African market, Madziwa concludes, but the properties that trade most easily will be the ones that can prove they are a risk worth taking on.
