South Australia’s compulsory third party (CTP) insurer, the Motor Accident Commission (MAC), made a net loss of $34.1 million in the year to June 30 – a result its CEO calls “predictable”.

The result “was heavily impacted by the annual independent actuarial analysis conducted at year-end, which saw a negative adjustment of $123.3 million posted to the MAC accounts”, the commission’s annual report says.

The adjustment was driven by changes to wage inflation and discount rate assumptions during the year.

However, the MAC says it remains in a “sound fiscal position”, with $397 million in net assets.

The number of road injuries and fatalities fell 6% on 2010/11 and CTP claims dropped 2.7%.

“While any level of road trauma on our roads is simply too high, we were very encouraged,” Chairman Roger Cook says in the report. “However, the rising medical, care and legal costs to the CTP scheme are a major concern, somewhat neutralising the benefit of the reduction in road casualties.

“These rising claim costs, together with unstable investment markets, necessitated a further increase of 4.7% to the class-one CTP premium, effective from July 1 2012.”

Allianz, in its ninth year as CTP claims manager for the MAC, finalised 6110 claims during the year. At June 30 the recorded claims portfolio was the lowest it has been since Allianz took up the role.

The MAC paid $337 million in CTP compensation for the year.