Investments power MVA Fund income
Keikantse Lesemela | Tuesday May 6, 2014 12:57
The fund recorded a surplus of P142.9 million and a total comprehensive income of P423.2 million in the year ended December 31, 2013. This was an increase from the previous year, in which the Fund recorded P130 million surplus and total comprehensive income of P258.4 million.
MVA Fund chief executive officer, Cross Kgosidiile said the increase in income was largely driven by the rise in net fair value on available-for-sale and offshore investments.
The fund recorded an operating income of P330.5 million in 2013 being an increase of 22.8 percent compared to the P269.1 million recorded in 2012.
“This increase was primarily attributable to foreign exchange gains on offshore investments, which increased by 262.1 percent from P29 million to P105 million.
Besides the fuel levy, which is its income backbone, the MVA Fund is heavily invested locally and offshore with total assets under management valued over P3.1 billion,” he said.
In the period, the net fuel levy decreased by 5 percent to P84.2 million due to the increase in provision for rebates while the net investment income decreased by four million from P129.7 million in 2012 to 125 .7 million in 2013.
“The decrease is mainly attributable to lower dividend income in 2013”. Total expenses increased by P48 million to P189 million in 2013.
“This is mainly due to an increase in incurred but not reported provision assessed by actuaries, which in turn increased claims expenses”, said Kgosidiile.
The net increase in claims provision also increased from P46 million to P76 million and the administrative expenses increased by P6.2 million.
Kgosidiile added that the fund received 2,078 claims during the year, 2.6 percent less than the 2,132 in 2012.
“The speed of claims settlement has also improved during the period as most claims are settled within three weeks from the date of receipt,” he said.
However the Fund is in the process of implementing the case management information system to assist in the efficient execution of operations.
“The implementation of this system will enable the fund to closely monitor medical treatment and rehabilitation of those injured in road crashes to improve their quality of life,” said Kgosidiile.
He explained that due to lack of adequate rehabilitation centers locally, the Fund refers severely injured claimants to facilities in South Africa. But to reduce the costs of rehabilitation, Kgosidiile said the Fund is collaborating with stakeholders to develop rehabilitation centres locally. “This initiative will build capacity as well as reduce the current high costs incurred for referrals to neighbouring countries,” he said.
MVA also planned opening a service centre at Rail Park Mall shopping centre in Gaborone to ease accessibility of services to the public.