(Bloomberg) -- South Africa’s property and casualty insurers face an even tougher year than expected after Cape Town experienced its worst storm in 30 years and dozens of fires engulfed the region around the town of Knysna this week.

Profits under pressure

The insurers, including Santam Ltd., Old Mutual Plc’s Mutual & Federal and Rand Merchant Investment Holdings Ltd.’s OUTsurance unit, are already being battered by an economy that slipped into a recession in the first quarter, the country’s credit rating downgrade to junk status, continued political turmoil and unemployment at a 14-year high.

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“Profit will be under pressure,” said Richard Hasson, an analyst at Electus Fund Managers in Cape Town. “In a weak economic environment, such as low gross domestic product growth and increasing unemployment, claims typically pick up, which will not be good for them. The recent fires and storms will affect the companies.”

'Severe devastation'

The storm in Cape Town claimed at least nine lives, blew roofs off houses, flooded buildings, downed power lines and forced schools to close on Wednesday. About a five-hour drive to the east, around the wealthy towns of Knysna and Plettenberg Bay, more than 26 fires broke out late Wednesday, with “severe devastation” in at least 12 suburbs, according to local government officials.