ROAD ACCIDENT FUND

1. ROAD ACCIDENT FUND Presentation of the RAF 2007 Annual Report to the Portfolio Committee on Transport 17 October 2007

2. CONTENTS • Highlights • Review of operations • Performance against objectives • Financial statements

3. HIGHLIGHTS Net Fuel Levy Income grows 26.3% Claims finalised increase 38.6% Claims backlog drops 23.5% Compensation paid rises 28.5% Cost to compensation ratio improves 8.3% Cash holdings at year-end R2,4 billion

4. HIGHLIGHTS Despite this … Outstanding claims liability grows11.8% to R23.9 billion Resulting in… Deficit rising 9.8%% to R20.2 billion

5. ENVIROMENTAL FACTORS ECONOMIC • Economic growth – 5% • Growth in vehicle population – 7.2% (8.5 m vehicles) • Increase in distance travelled – 2.1% (128.1 million vehicle kilometres) • Increase in road fatalities – 8.9% (15 393) • Foreign visitors – 8.5 million (1996) REGULATORY • NO CHANGE RAF Amendment Act remains elusive !

6. Losing battle ?

7. ECONOMIC CHOICES Constraints … Poor capital base (Grossly undercapitalised) Fuel levy too low to address the legacy SARS Fuel collection reduces cash receipts by R1 billion Choices… Clearing the backlogvsBuilding reserves/ appropriate capital base

8. KEY FACTS SouthAfrican vehicle population * Source: Road Traffic Management Corporation

9. KEY FACTS Vehicle accidents with fatalities in South Africa • Vehicle accidents with fatalities in South Africa * Source: Road Traffic Management Corporation

10. KEY FACTS Motor vehicle fatalities in South Africa * Source: Road Traffic Management Corporation

11. KEY FACTS Annual fuel sales for road use in South Africa * Source: Road Traffic Management Corporation

12. KEY FACTS Claims lodged with the RAF * Source: Road Traffic Management Corporation

13. REVIEW OF OPERATIONS Revenue

14. ANNUAL FINANCIAL STATEMENTS Statement of Financial performance (Income Statement)

15. REVIEW OF OPERATIONS Analysis of Total Income

16. REVIEW OF OPERATIONS Analysis RAF Fuel levy

17. REVIEW OF OPERATIONS RAF levy vs other fuel levies

18. REVIEW OF OPERATIONS RAF levy – diesel rebate

19. REVIEW OF OPERATIONS RAF Finance income

20. REVIEW OF OPERATIONS Analysis of Total expenditure

21. REVIEW OF OPERATIONS Claims Expenditure

22. REVIEW OF OPERATIONS Number of Claims Outstanding

23. REVIEW OF OPERATIONS Number of Claims Outstanding

24. REVIEW OF OPERATIONS Distribution of Claims settlements

25. REVIEW OF OPERATIONS Number of Claims Outstanding Distribution of claim settlements according to size

26. REVIEW OF OPERATIONS Composition of Claim payments

27. REVIEW OF OPERATIONS Composition of Claim payments – Contingency fees

28. REVIEW OF OPERATIONS Composition of Claims Compensation payments

29. REVIEW OF OPERATIONS Medical Undertaking Claims

30. REVIEW OF OPERATIONS Medical Undertaking Claims

31. REVIEW OF OPERATIONS Claims reported – delay between accident and reporting the claims to the RAF

32. REVIEW OF OPERATIONS Claims settled – time between accident and final settlement

33. REVIEW OF OPERATIONS Claims settled – average settlement amounts Average settlement amount per year finalised

34. REVIEW OF OPERATIONS Claims settled – average settlement amounts Claims greater than R500 000 as % of total finalised claims

35. REVIEW OF OPERATIONS Large claims – Foreign vs RSA claims

36. REVIEW OF OPERATIONS RAF staff count

37. REVIEW OF OPERATIONS RAF staff productivity

38. REVIEW OF OPERATIONS Cost to Compensation ratio’s

39. ANNUAL FINANCIAL STATEMENTS Statement of Financial position (Balance Sheet)

40. REVIEW OF OPERATIONS Solvency and Capitalisation

41. REVIEW OF OPERATIONS Liquidity

42. REVIEW OF OPERATIONS Number of reported claims vs Incurred claims

43. REVIEW OF OPERATIONS Ultimate claims expenditure per accident year

44. REVIEW OF OPERATIONS Provision for outstanding claims per accident year

45. REVIEW OF OPERATIONS Provision for medical undertakings

46. REVIEW OF OPERATIONS Provision for outstanding claims per accident year

47. RAF Performance against objectives for the 2006/07 Financial Year

48. RAF Performance against objectives for the 2006/07 Financial Year (continue)

49. SUSTAINABILITY Employment equity

50. SUSTAINABILITY Employment equity