The Actuarial Society of South Africa (ASSA) has released a research paper advocates replacing the current Road Accident Fund (RAF) system with a robust, financially stable hybrid solution that will fairly and timeously compensate future road accident victims.
The ASSA commissioned a team of three South African actuaries, consisting of Messrs Gregory Whittaker, David Rodda, and George Schwalb, to find solutions for a more viable compensation system for future victims of road accidents.
Currently, anyone involved in a serious car accident and in desperate need of financial assistance from the RAF is likely to wait many, many years before the claim will be processed and money paid. Mr Schwalb said that some claims relating to accidents that occurred more than 20 years ago are only now proceeding to trial.
RAF, a publicly administered compensation scheme funded by a fuel levy and available to anyone impacted by an accident not caused by them. While the RAF reported a deficit of ZAR2.3bn ($140.5m) at the end of March 2025, the real deficit is believed to run into hundreds of billions of rands, according to Mr Schwalb. He said audits, forensic investigations, parliamentary inquiries, and litigation outcomes have highlighted systemic failures across financial management, governance, legal compliance, and institutional accountability. Yet, multi-agency attempts to reform the RAF and its processes have proven fruitless.
RAF, RABS and CTP
In their research, the three actuaries used actuarial, legal, economic, and institutional analyses to compare the current system with two alternatives: the proposed no-fault Road Accident Benefit Scheme (RABS) and compulsory third-party (CTP) insurance offered by private insurers. Mr Schwalb said that there are elements in the design of all three options–RAF, RABS and CTP insurance–that in combination, have the potential to provide a reasonable, equitable, affordable and sustainable solution that will work for South Africa.
Mr Schwalb said, “After weighing the strengths and weaknesses of each model, we conclude that no single approach satisfies all four criteria simultaneously. The RAF offers comprehensive rights but struggles financially and administratively. RABS promises efficiency but raises legal and reasonableness concerns. Compulsory third-party insurance harnesses market mechanisms but faces compliance risks. A hybrid system could, however, integrate elements of all three models.”
Governance
He added that redesigning a new road accident compensation system is not enough. “Even the most robust policy framework will fail if it is poorly administered. The RAF’s challenges illustrate how governance failures can undermine a well-intentioned scheme. Strengthening management capacity, reducing fraud, improving claims processing, and enforcing accountability are therefore as important as choosing the right model.”