SAIA

South African Insurance Association

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Road safety initiatives

Since SAIA’s involvement with Business Against Crime South Africa began, motor theft has reduced by around 50% (measured per thousand vehicles) and, although still important is no longer the primary cause of concern for motor insurers. Instead, road safety has become an area of great concern as the motor account is under considerable pressure with around 70% of motor insurance claims being road accident related (and alcohol consumption is a factor in many of these instances) while still supporting crime initiatives to make sure that the successes that have been achieved are sustained.

The seventh annual donation of its kind to BACSA was approved in 2009, which will be partly pledged towards a road safety initiative in co-operation with Business Against Crime South Africa and the Johannesburg Metro Police Department. This initiative has been identified as extremely important in an attempt to curtail alcohol related road accidents and have resulted in the creation of a second blood alcohol testing centre in Gauteng.

Why road safety is important for our industry?

SAIA’s history with BACSA

SAIA was instrumental in the creation of Business Against Crime South Africa (BACSA) and has contributed to the funding of the institution since its inception. To this day we continue to contribute to the funding of their work. We participate with them in a wider area of crime-combating initiatives, namely violent and organised crime. The SAIA, on behalf of its members with motor insurance business, have annually made a donation of more than R1.5 million to Business Against Crime South Africa for the fight against vehicle crime. This has been in place since 2002. Great successes have been achieved with regards to the fight against motor vehicle crime since SAIA started making this annual donation.

Why road safety is the current focus

Since our involvement with BACSA began, motor theft has reduced by around 50% (measured per thousand vehicles) and is no longer the primary cause of concern for motor insurers although still important. Instead, road safety has become an area of great concern as the motor account is under considerable pressure with around 70% of motor insurance claims being road accident related (and alcohol consumption is a factor in many of these instances) while still supporting crime initiatives to make sure that the successes that have been achieved are sustained.

Statistics

Road safety is not only a South African challenge.

In the United Nations General Assembly report titled 2003 Road Traffic Injuries and their Impact on Societies, it is stated that “Road traffic injuries are a global problem affecting all sectors of society. To date, road safety has received insufficient attention at the international and national levels. This has resulted in part from a lack of political responsibility and multidisciplinary collaboration needed to tackle it effectively.”

The World Health Organisation in its review of "The Global Burden of Disease" projects changes in the ranking of the 15 leading causes of death and disease worldwide, from 1990 to 2020. In this review, the rating of road accidents as a cause of death is projected to move from a ranking of 9 in 1990 to 3rd in 2020.

What therefore is happening in South Africa on our roads?

In the Report of the Road Accident Fund Commission (2002) it is stated that “South Africa has one of the highest road traffic death tolls in the world. The reasons are manifold – ranging from arrogance behind the wheel to ignorance about the rules of the road; from fraudulent issuing of drivers’ licences to the absence of infrastructure to patrol and police the roads; from driving under the influence of alcohol to speeding. A number of initiatives from both civil society and from the authorities have failed to stem the rising tide of casualties.”

Furthermore, Arrive Alive reports (2009) that:

  • The number of unlicensed vehicles on the roads is 481,000
  • The number of unroadworthy vehicles on the roads is 377,000
  • There is a total of 970,000 expired licences
  • There is a total of 233,000 expired Professional Driving Permits
  • 90% of road accidents are preceded by a road traffic offence
  • It is estimated that the cost of road accidents to individuals, commerce, communities and the country tops R38 billion per annum
  • Every day 36 lives are lost on average. This means that in a year more than 13 000 lives are needlessly lost. Of these 15 are pedestrians and 3 are killed in taxi-related incidents
  • Around 20 people are permanently disabled on our roads every day
  • More than 7000 people are left maimed each year by poor attitude and behaviour on our roads

Despite these horrific statistics, road safety is not a national priority, and no government / business partnership exists to combat this scourge to society. Is it not time that everybody gets together to try to put a stop to this appalling carnage? South Africa can not afford to continue with the current appalling losses when something can be done to reduce the present unacceptable statistics.

The reasons for the current road safety problems

The reasons for the current road safety problems are many: The age of our vehicle car park, the lack of compulsory roadworthiness testing, alcohol abuse and the general poor attitude towards road safety of our drivers.

The ever increasing frequency of vehicle accidents can be partly attributed to the vehicle population estimated at over 9.5 million, as well as the inability of the road infrastructure to cope with the increase in traffic density.

The impact of road safety on insurance

The traffic density on the roads has increased the frequency of vehicle accidents. This has not only had an effect on the short-term insurance industry, but in turn, has cost our economy enormous amounts of money. The industry has experienced a continued increase in the average cost of repairs and this, amongst other factors has been associated with the introduction of a variety of imported vehicles into the market.

Road safety problems such as drunk driving have also impacted on the cost of comprehensive motor insurance, with the steep increase in the cost of claims contributing to a decline in profitability. In addition, the increase in vehicle accidents and the reduction in new vehicle sales add even more pressure to motor insurance portfolios.

While sophisticated underwriting tools have been implemented by insurers in an attempt to effectively manage costs, some external factors, such as the roadworthiness of vehicles, have compounded this predicament.

Therefore initiatives need to be put in place to ensure that motor insurance premiums remain available at an affordable price to the current and future policy holders of South African motor insurance.

The key challenges were recognised at SAIA Board level and Motor was adopted as SAIA’s fourth key strategic area with the sole focus of addressing the broad motor-related issues, more specifically the affordability and sustainability of motor comprehensive insurance. Being the main class of business within the short-term insurance sector, focus on this area is now a sector imperative.

Drunk driving

Because many of SAIA’s motor insurance members have recognised a problem in terms of motor vehicle accident related claims that are linked to alcohol, the area of drunk driving was identified as an area where urgent action is needed in light of the current road safety challenges. In fact, some of our members have indicated that, of the accident related claims where alcohol testing was undertaken, an estimated 80% of the claims end up being rejected.

In addition to the fatalities, it is important to note that drunk driving, or driving under the influence of alcohol, could also have a number of less obvious negative consequences for the drivers on South African roads.

Since driving under the influence and drunk driving are against the law, insurance claims as a result of such offences could be declined.

In addition, if South African citizens continue to have a spirit of unlawfulness when it comes to driving, including driving under the influence of alcohol and drunk driving, motor insurance premiums could peak to unaffordable levels which could mean that people might not be able to afford motor insurance cover. Should an accident happen when someone does not have insurance cover, there will be no cover for the loss and this could lead to extreme financial stress and unhappiness.

Insurance premiums reflect levels of risk, and if the risk of accident is perceived as extremely high, higher premiums will follow. Should we be unable to address the reasons for high accident rates in South Africa, for instance drunk driving, insurance companies could ultimately be forced to continue to increase motor insurance premiums. This will lead to a negative impact on consumers and ultimately the economy.

It is therefore vital that drivers and insurance companies start working together to keep motor insurance costs down.

Road safety initiatives

SAIA has, since 2002 donated funds to BACSA in an effort to fight crime. This year (2009), R1 535 000 was donated to Business Against Crime SA on behalf of SAIA members to be used as explained below:

  • R1 035 000 is to be used towards Business Against Crime South Africa's Violent and Organised Crime initiative, that includes vehicle crime and other crimes such as business robberies and household robberies;
  • The rest of the funds will be used for a road safety initiative in co-operation with Business Against Crime South Africa and the Johannesburg Metro Police Department. This initiative has been identified as extremely important in an attempt to curtail alcohol related road accidents and have resulted in the creation of a second blood alcohol testing centre.

In addition, a road safety initiative which will include an awareness campaign is currently being developed by the SAIA. SAIA has also recognized and supported the initiatives of Shayela Approved in promoting Defensive Driving Skills Standards. Defensive driving is defined as “Driving so as to prevent collisions in spite of incorrect actions of other road users or in the presence of adverse driving conditions”.

The SAIA has embarked on a consultative process with relevant stakeholders with an initial focus on non-Governmental organisations. The Road Safety Foundation (RSF) is currently leading “A call for a Decade of Road Safety” initiative in conjunction with the United Nations. It is anticipated by the RSF that some form of funding will be provided by the United Nations for the support of developing countries on initiatives for road safety.