Glencairn Boss Says Bad Year for Mining

November 10 - According to the Managing Director of Glencairn South Africa, Nick Hall, some mining companies around the world have suffered share price drops of over 70% in comparison to last year's statistics.

As a result, according to Hall, major insurance companies in South Africa, as well as on a global scale, have suffered serious losses, most of them due to financial difficulties and other global issues.

Hall said that since January, there has been an inexplicable number of big insurance claims in the mining industry, with many of them being bigger than the average claims felt throughout previous years. He showed that in South Africa there has been at least one major claim for losses to an insurance company that passed the R500 million line.

"There is no particular reasons for these losses," explained Hall. "It's not down to mismanagement which is actually improving globally. It's just a situation where losses this year have been more frequent. It has just been a bad year for mining."

Hall explained that the forecast for next year is not particularly optimistic, considering that this year was such a bad year. He said that since major claims were made, many insurance companies would be seeking ways to discourage small claims, such as increasing the level of deductibles in the insurance policies.

In addition, insurance companies such as Glencairn are more likely to be more selective in their undertaking risks next year, as a result of their losses. Although most insurance companies are naturally selective and examine each case as it comes, he believes that next year they will be even more so.

"The mining sector of the insurance industry is hurting right now," he summed up the situation.