MVA Fund achieves positive financial results
The Chairperson highlights that the attainment of the Fund’s mandate is largely dependent on its sustained existence, hence it is therefore imperative that while the Fund strives to respond appropriately to the needs of its claimants, it should also strike a balance between meeting those needs and keeping the Fund financially sustainable.
The Motor Vehicle Accident (MVA) Fund achieved positive financial results in 2015 despite the subdued global economy, the organisation indicates in its 2015 Annual Report.
In his report, the Board Chairperson, Freddy Modise says; “During 2015 the Fund achieved positive results, recording a Net Surplus of P130 million and a Total Comprehensive Income of P275.6 million. The achievement was attained despite the subdued global economy and the reduction of the fuel levy rate, which is the fund’s primary source of income, from 9.5 thebe to 5 thebe per litre, which was effected in November 2014.”
He attributes the positive financial performance largely to the high volatile investment income which was supported by higher foreign currency exchange and the net fair value gains on available-for-sale investments. “This financial performance surpassed the Net Surplus of P92.8 million and a Total Comprehensive Income of P164.8 million recorded in 2014,” he points out.
Total expenses in 2015, he says, amounted to P284.5 million compared to P245.1 million in 2014.” This increase was driven by claims expenses due to ever escalating medical costs. The reported net increase pertaining to the claims provision was P148.9 million in 2015 compared to P122.4 million in 2014. The lack of standard regulated medical tariffs in the country continues to make it difficult for the Fund to effectively manage its medical costs,” he notes.
Modise says however, the Fund remains resolute on its sound financial management and negotiates affordable tariffs with major private hospitals to ensure that claimants are accorded appropriate medical assistance to attain the best chance to normal life.
The chairperson highlights that the attainment of the Fund’s mandate is largely dependent on its sustained existence, hence it is therefore imperative that while the Fund strives to respond appropriately to the needs of its claimants, it should also strike a balance between meeting those needs and keeping the Fund financially sustainable. “The Fund therefore has to leverage on its strong financial position to ensure its long-term existence,” he concludes.
During the year 2015, the Fund was led by former Chief Executive Officer (CEO) , Cross Kgosidiile, for the large part of the year. Kgosidiile has since left the organisation, which he led successfully since its inception.
The organisation is currently led by Acting CEO, Mpule Ditirwa, who is concerned by the high death rate and escalating medical costs. “The high rate of death and injury suffered on the road is a grave concern, not only because of the devastating effects on the country but because the sustainability of MVA Fund, which is facing escalating, costs, is directly dependent on it. Road crashes not only impact on the social fabric and productivity of the nation, but also have major economic consequences,” she says.
a total of 411 deaths as a result of road crashes were recorded during 2015, and a total of 2, 583 claims were received in 2015, an increase of 23% over the claims received in 2014.