Posted on April 7, 2023

In South Africa, Insurers Fix Potholes, Sponsor Fire Brigades and Direct Traffic

Alexandra Wexler, Wall Street Journal, April 5, 2023

Insurance companies in South Africa are fixing potholes, sponsoring fire brigades and directing traffic in an attempt to lower payouts and lure new clients as the country’s government increasingly struggles to provide vital public services.

Corruption, mismanagement and the deepest recession on record amid the coronavirus pandemic have eroded the finances of South Africa’s municipalities and state-owned companies that are responsible for repairing infrastructure and providing essential services. With their unusual activities, South African insurers are joining other private companies in taking over public services, such as security, healthcare, education and mail delivery, in a country that the World Bank ranks as the most unequal on earth.

Insurance companies say the government’s shortcomings have led to higher payouts, and some have decided that it is cheaper for them to fill in where the state has fallen short. {snip}

Discovery Ltd., a $5.5 billion financial-services company, says its Pothole Patrol—made up of eight repair vehicles and 40 staff—has filled in 150,000 potholes in South Africa’s economic capital of Johannesburg since it launched in May 2021. The service, which Discovery runs together with a smaller competitor, Dialdirect Insurance, and has permission from the Johannesburg Roads Agency, has an app that allows anyone to log potholes that need fixing.


Discovery estimates that the Pothole Patrol has saved the car insurance industry approximately $2.2 million in claims over its first 2½ years {snip}


After a string of devastating house fires in wealthy suburbs of Johannesburg, Discovery in June 2022 also joined with a private fire service, Fire Ops SA, to launch its Fire Force service.

Fire Ops employs more than 60 firefighters across seven fire stations in Johannesburg and owns two fire engines—including one now sporting the same shade of blue Discovery uses for its logo and much of its branding—as well as six smaller high-pressure-pump response vehicles.

Discovery says the blue firetruck responded to 172 building fires between Fire Force’s launch through the end of January.


The service helps alleviate a shortage of operational fire engines in Johannesburg, a spread-out city of more than 5.5 million residents, in situations where minutes can make the difference between a blaze limited to a couple of rooms and one that destroys an entire house or spreads to neighboring homes.


On Feb. 20, the blue Discovery-branded truck was dispatched to a fire in Johannesburg’s leafy Highlands North suburb, where Fire Ops’ Captain Wade Hugo said his team had the blaze under control about 15 minutes before the city’s fire services arrived at the scene. The fire originated in the home’s living and dining room area and threatened to engulf several bedrooms, an office and adjacent garages, said Capt. Hugo.

“The community told us they’d already been trying to get hold of Joburg [Fire Department] for 20 to 30 minutes when we arrived,” he said.


Fire Ops also has to navigate public infrastructure that doesn’t always work, including traffic lights, fire hydrants and municipal water supplies.

The power cuts, which have reached new records in recent months, have increased Fire Ops’ response time in Johannesburg to 12 to 15 minutes from between 7 and 9 minutes, Mr. Engelbrecht said.