Getting SA's failing Road Accident Fund to work requires hybrid model, says ASSA

We all know how dangerous South Africa's roads are, with high alcohol use and widespread disregard for traffic laws resulting in thousands of crashes every year.

Last year, more than 11,000 lives were lost in road accidents, while many more people would have suffered serious injuries.

At the same time, the Road Accident Fund (RAF) is considered technically bankrupt, which means many of the 2025 accident victims or their families would have not have received financial compensation.

In fact some claims relating to accidents that occurred more than 20 years ago are only now proceeding to trial, notes the Actuarial Society of South Africa (ASSA).

The Society has now released a study which sets out to find solutions for a more viable compensation system for future victims of road accidents.

RELATED: Road Accident Fund technically bankrupt: Department of Transport warns of major fiscal risk

The researchers unpack options to guide the reform of this publicly administered compensation scheme, funded by the fuel levy paid by motorists.

They make a strong case for replacing the current system with a robust, financially stable hybrid solution that ASSA says will fairly and timeously compensate future road accident victims.

Stephen Grootes interviews actuary George Schwalb, who was part of the ASSA research team.

Schwalb notes that they looked at the RAF system, not the Fund as an entity.

The three actuaries compared the current system with two alternatives: the proposed no-fault Road Accident Benefit Scheme (RABS) and compulsory third-party insurance offered by private insurers.

"We actually measured whether any of these three systems complied to a system that would be sustainable long-term, affordable and equitable."

"We conclude that none of these general systems are viable on their own, but that we do need a hybrid solution. We don't go further to suggest exactly what this should look like; we recommend it should have components of the current RAF, the proposed RABS and compulsory third party insurance that is quite common in most developed counrtries."

Various viable combinations could be considered, says Schwalb.

One such option would be a system that provides basic no-fault benefits for medical care and rehabilitation, supplemented by fault-based liability insurance for additional damages. This would be delivered through a public-private partnership that includes the current RAF and private insurers, all under strong regulatory oversight.

Scroll up to the audio player to hear more about a better alternative to the current RAF system