The issue of Motor Insurance was, somewhat surprisingly, only added to our list of key strategic areas in the latter half of 2008. Since then we have developed a strategy that was adopted by the SAIA Board earlier this year and which seeks to get to grips with the causes of the problems that we are experiencing with road safety in South Africa, leading to extremely high claims for our members. The statistics are reasonably well known and in my opinion totally shocking. At present, approximately 40 people a day are being killed on our roads which means that the annual figure is 14 000. Of that number approximately one-third are pedestrians and this is not surprising when the experts tell us that a car moving at 70 kilometres per hour has the energy equivalent of 40 bullets. If a pedestrian is hit by a car doing 70 kilometres per hour, death is a near certainty. This statistic alone does not tell the story of the much greater numbers that are left permanently maimed or seriously injured, and the huge cost that this is to the country. This class of business for SAIA members is the largest class of business and more than half of all the claims paid out by the industry relate to motor claims. The SAIA Board and all our members, which write motor insurance, are hoping that the development of our strategy and our intention to work with other Governmental and non-Governmental Associations that are trying to assist in the reduction of the present carnage on our roads will soon start to have a positive effect. In my opinion, it is the most important area that we are dealing with and we must make a difference, not only for our members and policy-holders, but also for the whole of South Africa. Because of the importance of this strategic area, Viviene Pearson was recently appointed SAIA motor manager, and we wish her well in this vital task. She is certainly passionate about making a difference on our roads.

This could be partly attributed to the vehicle population in South Africa, estimated at over 9.5 million as well as the inability of the road infrastructure to cope with the increase in traffic density. This has, therefore, impacted on the cost of comprehensive motor insurance, with the steep increase in the cost of claims contributing to a decline in profitability.

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 and speed limits, have compounded this predicament.

To address this important issue, a work group was formed as a sub-committee of the SAIA Motor Advisory Committee. This workgroup identified key challenges facing the industry and proposed various interventions.

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

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