SWOV catalogus

343365

Investing to save lives : an impact investment case for preventing road trauma.
20170025 ST [electronic version only]
Davies, T. Newman, J. Hill, R. & Addis, R.
London, FIA Foundation for the Automobile and Society, 2016, 60 p., 40 ref.; FIA Foundation research series ; paper 7

Samenvatting The number of people who die or suffer serious injury due to road trauma is high and expected to grow.2 Children and young people are the worst a?ected.3 And the effects are most severe among communities that are already poor.4 The Sustainable Development Goal (SDGs) include ambitious targets to reduce this toll and the significant human, financial, social and economic burden it produces. The cases set out in this report apply an investment approach that values prevention. Each examines a different type of intervention in different country contexts and applies an investment model to demonstrate the improved outcomes and financial return that could be achieved by directing more capital to road safety. Case 1 is set in Australia and models investment in large scale infrastructure improvements to raise the safety rating5 on major roads in the States of Victoria and Queensland.6 The case illustrates the potential to save lives and avoid serious injury and translate the resulting cost savings into a positive return on investment, even for highly developed road systems. Improvements to the Victorian road network, which has already benefited from substantial investment, are projected to save 40 lives and 240 serious injuries over 20 years and deliver expected lifetime (insurance) claims cost savings that translate to a benefit cost ratio (BCR) of ~ 1.6 and deliver an internal rate of return (IRR) of ~ 6%. Making similar improvements to a highway that has not benefited from equivalent levels of investment, the higher risk Bruce Highway in Queensland, is by contrast projected to save 340 lives and 2,660 serious injuries over 20 years and deliver greater cost savings: BCR ~ 2.7; representing an IRR of ~ 20%. Case 2 is set in Cambodia and has a very different focus and context. The investment case is modelled on delivering improved outcomes as a result of interventions to increase safe behaviours on the road, specifically helmet use by motorcycle passengers in designated districts of Cambodia. The investment design employs an impact bond model that links financial return to the improvement in outcomes. A two year intervention, begun in 2014, is projected to save at least 14 fatal injuries and 260 other casualties and deliver an IRR (based on the expected cost savings modelled) of between 6% to 11% based on the targeted rates of increase in the observed use of helmets of 60% or better. These cases demonstrate the potential for impact investment models that make financial sense and improve outcomes for people and communities. The process illustrates the data and investment logic required to underpin the case to direct more resources to prevention. The insights gained through the exercise highlight potential for a similar process to be applied in other settings, including projects underway in different parts of the world. The investment case approach makes the cost-effectiveness of road safety interventions very concrete. The insights gained also underscore that there is a much greater dividend to be achieved by directing more capital to prevention. That is the dividend of reducing the human, social and economic consequences of road trauma for individuals, families, communities and, ultimately, society. These, often hidden, costs for families that lose income, lose opportunities for education and productive work and who are not always well-served by emergency or local health and care systems and services, are significant. They contribute to cycles of poverty and disadvantage. Preventive action not only reduces real costs of care, it can help break these cycles and that benefit can also be measured over time. Sustained progress toward meeting the SDG targets requires clear and early multi-stakeholder commitment to action. A targeted collaboration between motivated stakeholders from governments, foundations, financial institutions, delivery agencies, and in the case of low and middle income countries (LMICs), donor agencies could unlock opportunities connected with the SDGs and current road safety initiatives to design financial products and test feasibility of different approaches with stakeholders and in the market. This would have a powerful demonstration effect, link finance to achievement of the SDG goals and inform and enable data collection and learning toward creation of an evidence base. Such a practical partnership has real potential to deliver a breakthrough by evolving investment models that are sufficiently robust to underpin preventive action on road safety, at scale. (Author/publisher)
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