General

Much-maligned Road Accident Fund showing signs of improvement

Taurus Capital

It’s no secret that the Road Accident Fund (RAF), the State fund geared to provide financial relief to people injured or killed in accidents on our roads, has faced numerous challenges.  In fact, news headlines such as ‘Road Accident Fund faces imminent implosion’ and ‘Accident fund on a road to nowhere’ are all too commonly seen. And yet this is a social welfare tool crucial for the well-being of the thousands of South African road-users impacted by motor vehicle accidents. 

It is against this backdrop that there have been some significant moves to improve the ability of the RAF to meet its mandate.  Under new CEO, Collins Letsoalo, the Fund has begun to take action to address some of the concerns relating to its performance.

One indication that things are getting better is the findings of a new index that tracks the claims payout time of the Fund. ”The length of time it takes for a claim to be settled is crucial for the claimants,” explains Elad Smadja, CEO of Taurus Capital, an investment firm that has introduced the index, called the Taurus RAF Barometer. “Someone badly injured in a car accident may be unable to earn an income for a number of months – possibly forever – and so access to the funds is vital for the person’s very ability to feed and house themselves. This is why the claimant has every right to receive the compensation quickly.” Often, the beneficiaries are particularly vulnerable – young children of a disabled family breadwinner, for instance – and this again demonstrates why the timing of the payouts is so important.

According to Smadja, “Taurus Capital works with personal injury attorneys to help provide funding to claimants, a need that arose because of the often long delays in payments being made, in the past, by the RAF. Through our work with attorneys and the Fund, we realised that the expeditious payment of claims arising from accidents should be a major focus for the Fund – which is what prompted us to implement a tracking mechanism for the measurement of the payout time.”

The first report, which was recently released by Taurus Capital, reveals some positive news:  the Road Accident Fund continues to make progress in lowering average payment times. “The fact that payments came through faster during the 2nd quarter of 2021 is encouraging,” Smadja explains. “The stats show that, during this quarter, the payment times improved by over 10% compared to quarter 4 last year.”

While the current average payment term over the past Quarter – 281 days from the time of the claim being finalised to the date of the payment – is still higher than the 180-day benchmark set by the RAF, it is way better than the average time seen at the end of 2020, when the number of days sat at 312. The graph below reflects how the average payment period has improved over the past three quarters: 

Source: Taurus Capital

“We expect to see an additional improvement later on during 2021,” Smadja comments. “This should occur when certain cases that were suspended by the Fund because of duplicate payments have been sorted out.”

However, Smadja cautions: “Another factor that could impact average time taken for a payment is the extent of the revenue being raised for the RAF. Funding comes from levies that are included in the petrol price. Because of the recent Level 4 lockdown, it is likely that revenue may decline somewhat since there were fewer vehicles on our roads during the stricter lockdown period.  If this decline in revenue is significant, the payment times could be negatively affected,” he advises.

The Index that has been launched is likely to become an important gauge of the efficacy of the Road Accident Fund. As new measures are put in place by the management of the Fund to improve its performance, the Index will hopefully reveal the efficacy of the measures. 







Related posts
General

Our current leaders see the state as a source of livelihood, rather than an instrument for changing lives

ComplianceGeneral

Are all your reps Fit and Proper?

General

Workplace gender transformation: Start where you are

General

Women’s Month 2021: Celebrating female resilience