The debate over reforming the Road Accident Fund (RAF) is likely to intensify following new actuarial research indicating that no single compensation model – including the proposed Road Accident Benefit Scheme (RABS) – can address all the system’s structural weaknesses on its own, pointing instead to a hybrid approach that combines elements of multiple systems.
Commissioned by the Actuarial Society of South Africa, the study by actuaries Gregory Whittaker, David Rodda, and George Schwalb evaluates three approaches to compensating road accident victims: the current RAF system, the proposed no-fault RABS model, and compulsory third-party insurance (CTPI) provided by private insurers.
The study also situates these models within South Africa’s broader social security framework and compares them with international compensation systems.
Using actuarial, legal, economic, and institutional analysis, the research assesses each model against four policy criteria – whether it is reasonable, affordable, equitable, and sustainable – and finds that none satisfies all four simultaneously.
Mounting pressure on a strained system
The research is set against a backdrop of persistent strain in South Africa’s road accident compensation system.
More than 11 000 people died on South African roads in 2025, with many more sustaining serious injuries. However, many victims and their families are unlikely to receive timely compensation, with some RAF claims taking decades to reach trial.
“A sad reality is that 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. For many victims of road accidents and their families, this will mean insufficient emergency treatment, financial hardship, and delayed long-term medical care and rehabilitation,” Schwalb said in an ASSA media release accompanying the research paper.
The paper identifies significant financial and governance concerns, describing the system as “financially unsustainable, administratively inefficient, and inequitable in benefit allocation”.
It also points to a sharp rise in costs, with actuarial estimates indicating that RAF benefit costs increased fourfold in real terms between 2010 and 2020, driven largely by declining claims defence efficiency.
The paper further notes that the RAF’s fuel-levy funding has increased significantly in real terms over time, while the number of contributing vehicles has grown far more slowly, highlighting pressure on the system’s funding model.
RABS: faster access, but trade-offs
The proposed RABS model has been positioned by the government as a replacement for the RAF, shifting from a fault-based system to a no-fault scheme providing defined benefits through an administrative process rather than litigation.
The research finds that this approach could improve access to compensation and enable earlier medical treatment.
However, the paper highlights important trade-offs. It raises concerns that limiting or removing common law rights to sue may be constitutionally problematic if victims do not receive equivalent compensation. It also notes that defined benefits may be difficult to calibrate appropriately across different circumstances, raising questions about fairness and adequacy.
In this context, the researchers find that although RABS may address some inefficiencies, it does not meet all four criteria in all cases.
Private insurance: efficiency with limits
The third model considered is compulsory third-party insurance, widely used internationally and typically delivered through private insurers.
The paper finds that such systems benefit from actuarial funding discipline, competitive cost control, and more efficient claims management.
At the same time, it identifies significant challenges in the South African context.
In developing countries, many vehicle owners may regard compulsory insurance as unaffordable, leading to high levels of non-compliance. This creates a need for a parallel mechanism – typically state-backed – to compensate victims of uninsured or unidentified drivers.
Comparative finding: each model solves and creates problems
Across all three models, the research reaches a consistent conclusion: the trade-offs between efficiency, legal rights, cost control, and coverage cannot be fully resolved within any single system.
As Schwalb states: “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.”
The researchers point to a hybrid system as a potential way forward.
Schwalb outlines one possible configuration as a system that provides basic no-fault benefits for medical care and rehabilitation, supplemented by fault-based liability insurance for additional damages, delivered through a public-private partnership involving the RAF and private insurers, under strong regulatory oversight.
The paper similarly concludes that “a hybrid approach should be adopted for future accident compensation, combining the strengths and mitigating the weaknesses of the RAF, RABS, and CTPI systems, supported by sound governance reform and actuarial oversight to ensure long-term sustainability”.
However, the researchers do not prescribe a detailed model, and significant design and implementation questions remain, including how to deal with existing RAF liabilities and how any new system would be funded.
The research notes that replacing the RAF would require funding both a new compensation system and existing claims arising from past accidents.
Read: Transport pressed on whether RABS can deal with RAF’s legacy claims
According to Schwalb, this dual funding requirement is likely to be unaffordable in practice, and a hybrid scheme could be introduced in such a way to overcome this problem.
Governance as a critical factor
A central theme of the research is that structural reform alone will not be sufficient.
The paper documents governance failures at the RAF between 2020 and 2025, including weaknesses in financial management, legal compliance and institutional accountability.
Schwalb emphasises that improving governance is as important as choosing the right model:
“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.”
Reframing the reform debate
The findings suggest that the policy question is not simply whether to replace the RAF with RABS or another single model.
Instead, the research points to a more complex challenge: how to design a system that balances competing objectives – fairness, affordability, sustainability, and efficiency – in a way that reflects South Africa’s economic and institutional realities.
On the evidence presented, this is unlikely to be achieved through any single approach in isolation.
