Sunday, July 3, 2022

MVA blames forex for weak operating income

Motor Vehicle Insurance Accident Fund (MVA), the most liquid accident fund in the southern African region, bemoaned foreign exchange gain losses for its wobbling operating income for the full year to December 31, last year.

Total operating income nose-dived 16.8 percent to P 269 million as mirrored against the same period in the prior year. The offshore investments were P 28.5 million off in 2012 compared to P 98.8 million realised in the previous year.

However, total assets of the fund remained firmly strong as they stood at P 2.6 billion as against P 2.3 billion in 2011 that was largely attributed to the strong performance of the equity markets on the Botswana Stock Exchange and other offshore investments.

It also indicated that reserves also increased from P 1.85 billion to P 2.1 billion during the same period under review. And surplus was at P 130 million and comprehensive income was at P 258 million from a surplus of P 134 million and comprehensive income of P 137 million in 2011.

MVA operates in the Botswana market which has over 473 000 registered cars including those owned by government.

The fund said in its report signed by its Chief Executive Officer, Cross Kgosidiile and Chairman, Freddie Modise a number of factors, which including among others, a slow-down in claims and partial removal of the fuel levy supported the group performance.

Revenue from fuel levy sprang up by 12 percent to P 88 million largely powered by the reduction in fuel levy rebates.

During the period there were 404 fatal accidentsÔÇöcovered under its no fault system — while claims stood at 2 132ÔÇönine percent lower than last year. The move represents a claim of about P 28 million.

It said it is planning to ruthlessly use its sharp knife to cut down on cost for the severely injured claimants by partnering with third parties to develop rehabilitation centres in Botswana.

“This initiative will build capacity as well as reduce the current high cost incurred for referrals to neighbouring countries,” the report said.

It also praised the sale of its investment shares for propping up its balance-sheet as they contributed P 16 million- boasting the company’s net income to P 130 million, the fund said in its report.

RELATED STORIES

Read this week's paper